PARIS (Reuters) – The Bank of France and the country’s financial markets regulator urged Europe on Monday to step up work to halve the time it takes to settle a stock trade, helping Europe could catch up with Wall Street.
The joint statement from the Bank of France and the AMF supervisory authority referred to the so-called T+1 settlement cycle, which will reduce the time required to complete a share trade on the European stock exchanges to one business day (T+ 1), instead of two on the European stock exchanges. gift.
“The Autorité des Marchés Financiers (AMF) and the Banque de France call for a well-coordinated and efficient transition to a T+1 settlement cycle for securities transactions across the EU,” their joint statement said.
EU officials have said legislation may be needed to halve the time it takes to settle a stock trade in the European Union.
Regulations came into effect in the United States in May requiring trades in US stocks and corporate bonds to be settled within one business day of trading, up from two.
The U.S. Securities and Exchange Commission has said this faster settlement will make markets more efficient, although foreign investors will have less time to recall their U.S. securities and raise the dollars needed to trade.
Markets in Canada and Mexico are also adopting the reforms, which are designed to reduce counterparty risk and improve market liquidity, and Britain also plans to follow suit by the end of 2027.
“The timing of the move should therefore be tailored in a way that allows the EU to move together with other major European jurisdictions (e.g. Britain and Switzerland, subject to a political agreement with these jurisdictions), while sufficient time is given to European industry to prepare,” the French statement added.
