#USA #Stockholm #Vermiculus #GreySpark #T+1 Settlement

Vermiculus and GreySpark Team Up for T+1 Settlement Analysis

In a significant move for the financial industry, Vermiculus, a leader in market infrastructure, has joined forces with the renowned research firm GreySpark Partners to provide a thorough examination of the T+1 settlement transition that took effect in the U.S., Canada, and Mexico on May 28, 2024. The collaboration aims to offer crucial insights into the operational, technological, and infrastructural implications of this pivotal change within the North American financial markets.

The T+1 transition, which signifies shorter settlement cycles from trade execution to final settlement, is reshaping the landscape of market operations. According to Lars-Göran Larsson, an industry expert at Vermiculus, this shift is nothing short of a game-changer. “This transition necessitates that the industry rethink its operational strategies and upgrade systems urgently. The experience from North America sheds light on how such reforms influence settlement processes and create new demands for admin management,” he expressed.

In their joint analysis, Vermiculus and GreySpark explore how this move to T+1 has impacted critical aspects of market infrastructure, addressing key themes such as:

1. Operational Changes:
The transition to shorter settlement cycles has necessitated a reevaluation of operational workflows. This new model requires a focus on risk exposure and emphasizes the use of advanced automation in post-trade processes, aiming for greater efficiency and reliability.

2. Technological Integration:
The importance of technology in the financial sector has been amplified by this settlement shift. The report highlights how modern tech solutions are essential in adapting to the demands posed by T+1, with a strong emphasis on flexibility and high throughput.

3. Challenges and Benefits:
The research identifies a range of challenges faced by market participants as they adapt and integrates the new settlement cycles into their operations. While the benefits include increased efficiency and reduced risk, the transition poses significant hurdles that must be addressed.

Taraneh Derayati, CEO of Vermiculus, stresses the necessity of understanding these impacts on the financial ecosystem: “For the industry to grasp the implications of T+1, clarity on both challenges and opportunities is vital. Our partnership with GreySpark is instrumental in providing valuable insights that can guide stakeholders through this transition.”

The first installment of their analysis, titled “Implications of T+1 Settlement on North American Markets,” is now accessible for download. It draws on extensive data and research, including contributions from prominent financial entities like Acuity Knowledge Partners, Bloomberg, and the US Securities and Exchange Commission.

Looking ahead, Vermiculus and GreySpark are set to release additional articles focusing on the international ramifications of T+1, examining potential lessons and strategies that other global markets might adopt as they enact similar reforms.

Established in 2020, Vermiculus Financial Technology AB specializes in providing state-of-the-art trading, clearing, and central securities depository (CSD) solutions, all developed to adapt to the evolving landscape of market infrastructure. Their expert teams have successfully completed over 75 projects for major global exchanges and clearing houses, positioning them as a key player in financial technology innovation.

As financial markets continue to evolve, Vermiculus and GreySpark's collaborative effort provides an essential resource for understanding the future of trading and settlement in the modern financial landscape.