ALFI responds to the ESMA call for evidence on the shortening of the settlement cycle

In terms of cash management, asset managers will face difficulties to cope with the liquidity gap between the investment date in US securities (T+1) and the fund’s settlement date (typically T+3), combined with FX funding in particular.

A move to T+1 does not generate any direct benefits for asset managers.

ALFI requests forbearance from the policy makers as regards the likely crossing of the UCITS Directive cash/borrowing limits, specifically due to the T+1 impacts.

The EU would need a minimum of four years after the US go-live to potentially move to T+1.

View the ALFI response, and its annexes.