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T+2: A model in need of improvement
The exposure of counterparty buyers and sellers to each other for two days after a transaction has been executed represents a serious risk, especially in the context of recent market volatility. Some within financial services have recommended the settlement cycle be shortened to same day or T+0. The DTCC (Depository Trust & Clearing Corporation), which settles the bulk of securities trades in the US, does not endorse a T+0 model, but it has made compelling arguments for the market to shift to T+1. A handful of Asian regulators have also spoken about reducing the trade settlement cycle to T+1 but to limited avail. For instance, the Securities and Exchange Board of India (SEBI) floated the idea of shortening the settlement cycle to T+1 in 2013, but its proposals were met with fierce opposition from industry bodies which warned T+1 would pose operational difficulties for foreign portfolio investors.[1]
However, industry attitudes are gradually shifting in favour of a shorter settlement cycle. “Shorter settlement cycles could help reduce counterparty risk, especially during market turbulence. It would also mitigate market risk, namely the threat of adverse market movements in the case of settlement delays,” commented Rajah THIYAGARAJAH (Rajah-T), Chairman of Hex Trust. In addition, shorter settlement cycles would provide benefit through operational efficiencies and lower clearing costs. These savings should not be underestimated. When
the US migrated from T+3 to T+2 in 2017, the DTCC calculated market participants’ average daily capital requirements for clearing trades via the NSCC (National Securities Clearing Corporation) fell 25%, corresponding to USD1.3 billion in savings on margin requirements alone.[2]
COVID-19 has further heightened calls for a shorter-settlement cycle. According to Rajah, during the volatility of March
2020, margin increased dramatically by more than 300% over historical averages, largely attributed to higher turnover. A shortened settlement cycle would significantly lower margin requirements. “The reduction of liquidity demands and lessening the amount of money that needs
to be collected is a key benefit that will strengthen our financial markets, especially during critical market events that result in significant market volatility,” according to the DTCC paper.[3] Others concur. “Shorter settlement cycles would enable participants to net significant collateral cost savings. Settlement efficiencies would also help generate further liquidity and increase overall trading volumes,” added Rajah.
買賣任何一方在交易後兩天內有可能不履行交 易義務,構成了重大風險,尤其最近市場波動, 風險尤大。一些金融服務業界人士建議把結算 期縮短至即日交收,亦即T+0。處理美國大部分 證券交易結算工作的存管信託公司(DTCC)並 不贊同T+0模式,但提出有力的理據,主張市場 向T+1模式進發。一些亞洲監管機構也提出把 交易結算期縮減至T+1,但進展不大。例如印度 證券交易委員會(SEBI)在2013年提出把結算 期縮短至T+1,但遭業界組織強烈反對,指T+1 對持有海外證券的投資者構成運作上的困難。[1]
然而,業界正逐漸傾向接受較短的結算期。Hex Trust主席Rajah THIYAGARAJAH (Rajah-T) 稱:「較短的結算期有助降低交易對手風險, 在市場波動的情況下更見可取。縮短結算 期也可減輕市場風險,亦即交收延誤期間 市況逆轉的風險。」此外,較短的結算期也可 提升營運效率,降低結算成本,這些節省的 成本不容低估。美國在2017年由T+3轉變至 T+2,據DTCC的計算,市場參與者透過全國 證券結算公司(NSCC)作交收所需的平均 每天資本要求下降了25%,折合現金計算, 僅保證金借貸的需要便節省了13億美元。[2]
新冠肺炎疫情也加強了縮短結算期的逼切性。 Rajah指出,在2020年3月市況波動的時候,保 證金借貸額較歷史平均激增超過300%,主要 由成交額增加所致。縮短結算期,可大幅減少 保 證 金 借 貸 的 需 要 。根 據 D T C C 文 件 ,「 對 流 動 性的需求下降,減少須收取的金額,是一大好 處,可使金融市場更穩健;尤其是有重大市場 事件,導致市場大幅波動時,降低流動性的好 處特別明顯。」[3],其他人士也有類似的看法。 Rajah補充:「縮短結算期,可讓交易參與者節 省大量抵押成本。提高結算效率也有助增加流 動性,提升整體交易量。」
ISSUE 119 • 2021
“Hong Kong has an excellent track record of innovation and its regulators are pursuing a policy focused on digitisation.

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