While most North American financial services were enthusiastic about the move to T+2 settlement last year, there may be a hidden disruptive factor, says Jamie Anderson, general counsel, corporate secretary, Canadian Securities Exchange (CSE), based in Toronto.
“Where there’s a payback in terms of the costs associated with reducing the settlement cycle, they’ll endorse it,” Anderson says of the market participants involved in the popular move to shorter settlement. “For T+2, everyone was singing in harmony on both sides of the border.”
Yet Anderson says that the T+2 move may a larger consequence.
“Moving forward, it could be more of a disruptive type of an event, and maybe some firms will be embracing the change and some not. We’ll have to wait and see what the future holds,” he says. “Disruptive in terms of changing the current settlement process. So, right now, the Canadian and U.S. side, there’s really only one central securities depository. With the advent of blockchain coming to be, there could be more clearinghouses and central securities depositories. I see there could be competitive issues.”
FTF News interviewed Anderson during the Securities Operations Conference (SecOps) produced by Financial Technologies Forum (FTF) in Toronto this past June. His presentation at the conference “Why Settlement Is Still a Work in Progress” explored the future of shorter settlement cycles.
CREDITS:
Video Production: Janene Knox and William J. Poznanski, Jr.
Interview conducted by: Eugene Grygo, chief content officer, FTF News
Co-Producers: Sarah Hathaway, vice president, Financial Technologies Forum (FTF) and Eugene Grygo
