BHP Debates Improved Bid as Time Runs Out in Anglo Takeover SagaBitcoin Developers Are Touting ‘Programmability’ as the Catalyst for the Next RallyInter Milan-Oaktree Debt Deadline Drama Coming Down to the WireSouth Africa Rides a Wave of Investor Cash Before the ElectionBig Funds Bet the ‘Anything But Bonds’ Trade Is Poised to EndA 25-Year-Old BofA Credit Trader Dies Suddenly at Industry EventOil Refinery in Southern Russia Halts Work After Drone StrikesGoldman Sees Fear of Underperforming as...
International investors — who hold about $27 trillion in American markets — face a system in which the usual method of funding a US trade takes longer than they actually have to execute the deal. Unheralded parts of the trading process like affirmation , fixing errors, and recalling securities out on loan must happen at least twice as fast. Global funds face a mismatch where cash flowing in and out moves at a different speed to the assets they have to buy and sell.
At JPMorgan Chase & Co., internal modeling shows about a quarter of the currency trades it processes for clients are set to be impacted. Brown Brothers Harriman & Co. is putting clients through a “T+1 simulator” to identify those with potential issues. Just 9% of sell-side firms polled by Coalition Greenwich in April and May said they expect the T+1 switch to go smoothly, with 38% warning that buy-side managers are unprepared, and 28% believing trading platforms aren’t fully ready. Almost a fifth anticipate a large disruption with “many or severe issues.”
The $7.5 trillion-a-day foreign-exchange market is a flashpoint of the shift, because currency trades typically settle on a T+2 basis. An overseas investor buying a US stock will soon need to either have dollars ready or find them within a day in an arena where it can take two.
“It’s about trying to mitigate the additional operating risk which is falling on asset managers,” said Conn. There will only be a “very short window” after the US market close to resolve problems, he said. “There’s 25 to 30 days a year where there’s potentially specific challenges,” said Vincent Bonamy, head of global intermediary services at HSBC. He has organized staffing for “specific holidays on a global basis” to help clients with liquidity provision.
The new rules require that affirmations are finalized by 9 p.m. in New York on the date of a trade. Data from the Depository Trust & Clearing Corp., which oversees post-trade functions for the bulk of American securities transactions, show that affirmation rate rose to 83.5% in April from 74.95% a month earlier.
Source: News Formal (newsformal.com)
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: KitcoNewsNOW - 🏆 13. / 78 Read more »
Source: KitcoNewsNOW - 🏆 13. / 78 Read more »
Source: YahooFinanceCA - 🏆 47. / 63 Read more »
Source: YahooFinanceCA - 🏆 47. / 63 Read more »
Source: CTVNews - 🏆 1. / 99 Read more »
Source: YahooFinanceCA - 🏆 47. / 63 Read more »