New post-trade operating model - settlements: whitepaper

Understanding why settlements are transforming and what firms need to do to prepare for the next post-trade operating model.

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Part one of the series examines how T+1 is reshaping post-trade operations. It explores the role of affirmations, T+0 allocations and confirmations, real-time inventory management and the growing pressure on FX and securities lending under shorter settlement cycles.

T+0 allocations critical

Operations

Completing allocations on trade date was also identified as a priority by the UK Accelerated Settlement Taskforce — a genuine point of market-wide consensus.

Firms that have not yet automated allocations face the clearest and most immediate execution risk ahead of their T+1 deadlines.

FX spreads rise

Cost

A significant share of firms have now moved gross FX execution into the trading day — increasing both timing pressure and per-transaction cost.

As more firms make the same adjustment, liquidity in the trading-day window may compress further.

Hiring fills gaps

Resources

This reliance on manual support is pushing staffing costs up by as much as 20%, particularly outside normal business hours.

Hiring is a transitional response, not a scalable one — firms that do not automate will face rising costs as volumes grow.

Settlement transformation is no longer a regional issue. As North America moves to T+1, other markets are preparing to accelerate their own settlement cycles and firms are being forced to rethink how they manage execution, funding and operational control.

What will define successful settlement transformation as more markets move towards T+1? Where are firms already seeing the greatest pressure as settlement windows compress?

Part one of the series examines why post-trade settlement is evolving and what firms need to do to navigate the transition. It looks at the role of affirmations, T+0 allocations and confirmations, real-time inventory management, and the impact of tighter settlement windows on foreign exchange (FX) and securities lending.

The research, produced in partnership with S&P Global Market Intelligence, highlights:

68% cite T+0 allocations as critical: completing allocations on trade date is seen as a key requirement for a smooth transition to T+1

Firms executing gross FX during the trading day have seen spreads rise by up to 50% as timing pressure increases

75% rely on additional hiring: manual support remains a key enabler of T+1 readiness, but it is also pushing staffing costs up by as much as 20%

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