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In the current state with T+2 you have 48 hours to execute a security trade, match that trade with brokers, execute the FX and get everything settled. Jumping ahead in time, covid-19 was another external factor which put a lot of pressure on assetmanagers in terms of how and where work was being done.
The current timeline for the UK appears to include a plan being put in place in 2025 with the implementation of a T+1 settlement cycle in UK occurring no later than 31 December 2027. European assetmanagers moved staff to the US to manage foreign currency risks during the US 4PM to 6PM time zone rather than late at night in Europe.”
This conversation is especially relevant as cross-border transactions grow in volume and as assetmanagers expand their investment in international markets. The UK has outlined a roadmap targeting Q4 2027, but despite ample time to prepare, significant actions are likely to commence soon.
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