European fund managers and banks face a rush to be ready for reforms to the US securities market in the wake of the meme stocks mania, or potentially face problems trading in the world’s biggest capital market. A rush of activity has been sparked by a US plan to halve the two-day window set aside to finalise millions of share and bond deals, starting next May. The move marks one of the biggest changes to the US market structure in recent years, with ramifications for traders around the world.
a European trade body for banks and brokers, estimates the move will mean an 83 per cent reduction in settlement times for local banks and investors. Moreover, the shift will throw US securities settlement out of lockstep with related global markets, including the vast $2tn a day spot foreign exchange market.
but he added that current currency settlement windows are also “based around central bank funding windows and cut-off times and so any changes made there, there’s potentially knock on impacts”. Another impact is in the ETF market, for funds that contain both US and non-US assets.
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Source: i newspaper - 🏆 8. / 89 Read more »