Moving to North American T+1 Settlement for APAC Investment Firms

Jun.26.2024

Although T+1 settlement cycle requirements came into effect in the U.S and Canada, they still impact investment managers globally. For firms in APAC, the new timing combines with time zone differences to create unique challenges.

At recent Client Forum discussions on the upcoming change, held in Hong Kong and Singapore, we shared Enfusion’s approach for the change. Firms throughout the region will require adequate support coverage during early morning APAC hours. Enfusion’s services now include a proactive approach to reviewing clients’ scheduled trade files. We also offer trade affirmation Managed Services designed to eliminate the difficulties of T+1 requirements in North America.

The Client Forum also highlighted several issues that APAC firms need to consider now that the 28 May 2024 transition date has occurred:

SEC Rules: New Exchange Act Rule 15c6-2 states that Broker-Dealers and Investment Managers must complete allocations, confirmations, and affirmations as soon as technologically practicable and no later than by the end of trade date.
Cash Management: Investment Managers need to navigate different settlement cycles in various markets. For instance, selling HKD / AUD / JPY (T+2 settled) positions to fund a USD (T+1 settled) purchase requires forward-thinking from the investment team. Settlement is evolving beyond a mere operational procedure.
US Trading Hours Coverage: In addition to coverage from investment management platforms, firms need to account for the five-hour overnight window and resulting cutoff times across all aspects of their operational workflows, including Commissions, Fees, Allocations, and Discrepancies.
FIX: Investment managers need to enhance trade capture and affirmation workflows. Possible scenarios include FIX dropcopy and direct FIX connectivity.
Trade Matching: Firms must compare providers when adopting trade matching technology such as DTCC's ITP CTM and/or messaging protocols (e.g. FIX) to automate the communication of allocations and CTM's Match. More timely trade affirmation is critical.

We extend special thanks to our clients and partners for their participation and invaluable insights during these Client Forums. Both events included active and lively discussion.

The Singapore Client Forum featured a panel discussion with experts from Enfusion, DTCC, Northern Trust, and Apex Group, who shared strategies and best practices for the transition to U.S T+1 settlement. The interactive session covered real-world scenarios and best practices to ensure a smooth transition for APAC investment firms.

Enfusion clients gathered at the Client Forum in Hong Kong to address the critical transition to the U.S T+1 settlement cycle. Attendees gained insights from industry experts on the operational and technical changes required across the trade lifecycle.

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Moving to North American T+1 Settlement for APAC Investment Firms

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