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The majority of market participants expect the settlement cycle for equities to shorten to T+1 within the next five years, according to recently published research.
The survey, conducted by Citi, showed that 51% of the 300 or so financial services firms, anticipate next day settlement by 2026, a seven point improvement on the previous year’s survey.
According to Citi, this finding is supported by the actions of key equities markets in the US, Canada and Italy, which are actively moving towards T+1 settlement.
The study also shows significant support for the use of blockchain and DLT with 54% stating that the technology could cut post-trade processing costs by 10-30% while 92% see the value of tokenisation to market liquidity.
However, DLT is only expected to have a limited influence on the move to T+1 with just 21% stating that it will be core to a shortened settlement cycle.
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