In this latest edition of Regulation Around the World, we focus on the global transformation of the settlement of securities transactions, as many jurisdictions begin to shift from a standard settlement timeline of two business days after trade to just one. In this issue, we examine these developments, exploring the regulatory frameworks, cross-border challenges and technological innovations that are reshaping the post-trade landscape. In a number of jurisdictions we cover the following questions:
- What is the current regulatory and market settlement cycle, and what changes are planned?
- In respect of asset classes other than crypto assets or tokenized securities, what challenges or risks have been identified with transitioning to T+1 or instantaneous settlement?
- How does the jurisdiction address (or propose to address) cross-border settlement mismatches when counterparties operate on different settlement cycles (such as T+1 vs T+2)?
- What regulatory or operational measures exist to mitigate cross-border liquidity and FX timing pressures created by shorter settlement cycles?
- To what extent does the jurisdiction permit or envisage 24/7 trading in securities or other financial instruments, and what regulatory or operational challenges have been identified in connection with continuous trading cycles?
- What is the regulatory treatment of blockchain-based or tokenized asset settlement?
- How do regulators approach cross-border legal recognition of blockchain-based settlement finality across multiple jurisdictions?
Read the full update here.