As a result of the CSD regulation (CSDR) which will migrate European markets to T+2 settlement beginning in October, the International Capital Markets Association (ICMA) will change the standard settlement cycle for cash transaction set out in the ICMA Rules and Recommendations from T+3 to T+2, unless otherwise agreed, to allow for the orderly trading of all fixed income securities traded under ICMA rules.
ICMA is adjusting its rules because the ICMA Market deals with transactions that fall outside the scope of CSDR. The ICMA Market deals with international securities, intended to be traded on an international cross-border basis through an International CSD, which are often negotiated bilaterally and may be neither executed nor reported to a trading venue. Thus, these transactions would not fall under the shorter settlement cycle mandated by CSDR.
ICMA also plans to shorten the settlement cycle of securities finance transactions such as repo from T+2 to T+1.
ICMA Set to Shorten Settlement Cycle for OTC Transactions and Repo
As a result of the CSD regulation (CSDR) which will migrate European markets to T+2 settlement beginning in October, the International Capital Markets Association (ICMA) will change the standard settlement cycle for cash transaction set out in the ICMA Rules and Recommendations from T+3 to T+2, unless otherwise agreed, to allow for the orderly trading of all fixed income securities traded under ICMA rules.
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