FX Deadline Becomes $70 Billion-a-Day Risk for Europe’s Currency Markets
- Fund managers are piling on pressure on new settlement rules
- Foreign investors will have a day less to find cash for trades
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European asset managers are piling pressure on global regulators as they warn as much as $70 billion of daily currency trading could be at risk from a faster US settlement cycle.
The US Securities and Exchange Commission and the Federal Reserve Bank of New York should get the world’s largest currency settlement firm, CLS, to extend its cut-off time for next day settlement, the European Fund and Asset Management Association said. That’s because US plans to halve the time it takes to complete securities transactions to just one day from May — known as T+1 — means European investors will struggle to meet the current deadline of 6 p.m. in New York.