LONDON–(BUSINESS WIRE)–A Citi survey shows that market participants around the world increasingly believe that shorter settlement cycles will become a reality.
The second edition of Citi’s “Securities Services Evolution” white paper shows that 51% of market participants expect the effective settlement period for equities to be T+1 by 2026, an increase of seven points compared to last year’s survey. This sentiment is supported by several key markets recently moving towards a T+1 settlement cycle, including the United States, Canada and India.
Okan Pekin, Global Head of Securities Services at Citi, said: “We are seeing a greater sense of momentum and purpose in all industry developments, especially the determination to move to a T-settlement cycle. +1. Implementing these changes will not be an easy task, but in due course will offer the prospect of very substantial savings and efficiencies. »
Citi’s white paper includes quantitative and qualitative data gathered from 12 financial market infrastructures (MFIs) and nearly 300 market participants across banks, broker-dealers, asset managers, custodians and institutional investors across the world. whole world. Collectively, this information continues to provide a rare and holistic view of ongoing developments in the global securities market ecosystem.
Here are some new findings from this year’s white paper:
88% of market participants said their organizations were actively participating in or exploring use cases for digital assets, blockchain, or distributed ledger technology (DLT).
54% said a DLT-based market infrastructure could reduce post-trade processing costs by 10-30%.
79% believe that the atomic settlement is achievable in less than 10 years.
92% see the value and benefits of tokenization for market liquidity and variety of tradable assets.
MFIs and market players continue to hold opposing views on a number of issues. For example, MFIs see reduced risk as a major benefit of shorter settlement cycles, which in turn will lead to lower margin requirements and capital release. In contrast, only 17% of market participants surveyed agreed.
On the other hand, MFIs and market players have come together on their views regarding the role of DLT in facilitating a successful transition to T+1/T+0. MFIs believe that while DLT has a role to play, it is not an essential requirement. Only 21% of market participants (compared to 40% last year) believe that DLT will be at the heart of a shortened settlement cycle.
With more than $25 trillion* in assets under custody and administration and with an industry-leading proprietary network spanning more than 60 markets, Citi Securities Services offers clients deep local market expertise in the field, post – Innovative trading, customized data solutions and a wide range of custodial and fund services that can be tailored to meet client needs.
*As of 06/30/2002, represents the total of assets in custody, in administration and in trust.
Citi is a leading banking partner for institutions with cross-border needs, a global leader in wealth management, and a popular personal bank in its home market, the United States. Citi does business in more than 160 countries and jurisdictions, providing businesses, governments, investors, institutions and individuals with a wide range of financial products and services.
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