CLS today issued an update on the impact on CLSS settlement following the implementation of T+1 on the US securities market on May 28, 2024.
Throughout June, CLS monitored average daily CLSS settlement prices and volumes and confirmed that there was no decline in either metric. In fact, average daily CLSS settlement values increased from USD 6.6 trillion in 2023 to USD 7.1 trillion (year to date), and June 2024 was a record month with average daily values of USD 7.8 trillion.
CLS saw a slight increase in submission values related to funds in the CLSS settlement starting from 14:00 CET onwards, with a sharper increase between 22:00 and 23:00 CET followed by a decrease after 23:00 CET . The initial increase is more significant than the subsequent decrease, suggesting no overall loss in submission values.
CLS notes that while it cannot definitively attribute the observed growth to the move to T+1, there are early signs to suggest that the shortened settlement cycle is affecting behavior in asset managers and fund communities during this time period.
For example, the increase seen since 14:00 CET could indicate an increase in funds executing the foreign exchange component of a security prior to the confirmation of execution of securities trades. The increase between 22:00 and 23:00 CET may indicate that funds are still able to submit security-related payment instructions to CLSSettlement, possibly due to improved process automation and support from global custodians to adjust of cut-off times before CLS Deadline 00:00 CET initial payment schedule (IPIS).
The company will continue to monitor and analyze its transaction data and provide further updates as appropriate.