T+2 is Here, but Don't Hold Your Breath for T+0
Talk of shortening the settlement cycle further is premature and ignores the upheaval it would cause.

Anyway, the term has been ringing around my head over the past few weeks as I’ve edited our US reporter Emilia David’s piece on shortening the settlement cycle to T+2 in the US. When I was last at Waters, covering the sell side from London, I also covered the European move to T+2, although not with as much aplomb as Miya did in her feature.
We’ll be following up her feature with a number of spin-off pieces, and a look at how everything goes next week after September 5, when T+2 becomes the new standard in US markets for settlement. What I’ve found interesting is how much the discussion in the US has echoed that in Europe, in terms of already talking about shortening the cycle further.
It’s unclear, however, who exactly wants a T+1, or even a T+0, semi-real-time environment. For the buy side, certainly, it would put something of a crimp in the securities lending market, and undoubtedly have knock-on effects in areas such as repo, or short-term derivatives contracts.
For the sell side, I can see the benefits to an extent, but again from people I speak to, it seems there’s little appetite at present, mostly because it will involve a wholesale revamp of systems and technology processes to accommodate. The move to T+2, by contrast, has been a relatively simple one in terms of technological lift.
It would, of course, also be an enormous headache and strain for the middle and back offices, which are already stretched given the emphasis on compliance and risk in recent years, and the stringent regulations placed around areas such as settlement finality and trade reporting by regulators.
Is it likely to happen, though? Probably. Eventually. Just like 50 years from now, when everything is traded electronically, people will find the idea of the debates we have around electronification quaint and backwards. But not for some time yet.
Until then, well done to the US. You got there in the end, guys.
This week on Buy-Side Technology:
- My colleague Anthony Malakian and I covered cybersecurity in-depth this week, with a story on the New York state regulator’s new rules for financial firms, and a segment of the podcast dedicated to exploring the story beyond what we printed on the screen.
- After threatening to write about the Investment Book of Record again, I finally got around to it late last week. Here’s the piece.
- Awards! Awards everywhere! This time it’s an extension to the Buy-Side Technology Awards by one week, and an announcement that entries for this year’s American Financial Technology Awards will open on Monday, September 4. Which is Labor Day here in the US, so get your colleagues in London to start those entries, as punishment for their day off last week.
- I don’t know much about Malaysia, but luckily I have a talented Asia-Pacific reporter who does. Wei-Shen covers off how restrictions on the ringgit and other areas are pushing Malaysian money into analytics.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
Nasdaq looks to Thailand, Broadridge grows patent portfolio, GenAI concerns, and more
The Waters Cooler: MarketAxess gains majority control of RFQ consortium, the Bloomberg Terminal integrates with BNP’s Exane, and Isda extends reg reporting support to new Canadian rules in this week’s news roundup.
Growing pains: Why good data and fortitude are crucial for banks’ tech projects
The IMD Wrap: Max examines recent WatersTechnology deep dives into long-term technology projects at several firms and the role data plays in those efforts.
Overnight trading gets another boost with deal between FactSet’s LiquidityBook and Blue Ocean
FactSet’s recently acquired LiquidityBook OMS will grant buy-side clients access to overnight trading on Blue Ocean.
Optiver relies on BMLL market data for quant strategy
The market-maker has built its trading business on top of BMLL’s Level 3 data. But the collaboration is young, and the pair have grand plans to make options the next quant frontier.
Bloomberg expands IBVAL; the SIPs and 24/5 trading; Broadridge’s agentic play, and more
The Waters Cooler: State Street embraces interop, Citi’s CIO outlines the XiNG risk platform, power companies explore alternative nuclear supply options to datacenters, and more.
State Street’s interop play for FX and easing technical debt
Waters Wrap: About six years ago, State Street partnered with Interop.io to tie together its GlobalLINK suite of platforms. Anthony explores how this plays into the “reuse” mantra.
LSEG-AWS extend partnership, Deutsche Bank’s AI plans, GenAI (and regular AI) concerns, and more
The Waters Cooler: Nasdaq and MTFs bicker about data fees, Craig Donohue to take the reins at Cboe, and Clearwater closes its Beacon deal, in this week’s news roundup.
From server farms to actual farms, ‘reuse and recycle’ is a winning strategy
The IMD Wrap: Max looks at the innovative ways that capital markets are applying the principles of “reduce, reuse, and recycle” to promote efficiency and keep datacenters running.