European funds face upsurge in settlement risk after T+1

Two-fifths
of
European
fund
managers’
daily
foreign
exchange
flows
could
be
forced
to
settle
outside
of
CLS,
a
prominent
trade
association
has
warned. 

According
to
a
new
whitepaper
from
the
European
Fund
and
Asset
Management
Association,
the
upcoming
move
to
a
T+1
securities
settlement
cycle
in
the
US
and
Canada
on
May
28
would
result
in
a
significant
increase
in
bilateral
settlement
risk
for
FX
trades.

On
a
normal
day
of
trading,
Efama
found
that
up
to
40%
of
daily
flows
from
European
asset