Citi’s Post

T 1 will compress affirmation times by 16.5 hours, shortening allocation and confirmation times too. Institutions and investors operating across time zones will need to prioritize managing this new process. Learn more about how Citi Securities Services is helping clients take the pressure off: http://citi.us/49uOgNK

With T 1 inching closer in the U.S., managing allocation and confirmation times will be a key priority. Learn more here: https://lnkd.in/gbdtbgaF

New Post: Should Investors Keep an Eye on JPMorgan and Citigroup (C) in 2024? - https://lnkd.in/gc9DkRGF - The banking sector has showcased commendable resilience and stability, defying the hurdles encountered at the beginning of 2023. Following a substantial resurgence in bank stocks, let’s examine whether investors should... - Download: Stupid Simple CMS - https://lnkd.in/g4y9XFgR

𝙏𝙧𝙖𝙣𝙨𝙞𝙩𝙞𝙤𝙣 𝙩𝙤 𝙏 1 𝙎𝙚𝙩𝙩𝙡𝙚𝙢𝙚𝙣𝙩 𝙞𝙣 𝙐𝙎 𝙈𝙖𝙧𝙠𝙚𝙩𝙨: 𝘼 𝙎𝙞𝙜𝙣𝙞𝙛𝙞𝙘𝙖𝙣𝙩 𝙎𝙝𝙞𝙛𝙩 𝙞𝙣 𝙍𝙞𝙨𝙠 𝙈𝙖𝙣𝙖𝙜𝙚𝙢𝙚𝙣𝙩 The transition to a one-day settlement (T 1) in the US capital markets is progressing smoothly, resulting in a notable reduction in the cash buffer for counterparty defaults. According to The Depository Trust & Clearing Corporation (DTCC), the National Securities Clearing Corporation Limited’s Clearing Fund has decreased by approximately 25%, releasing $3.1 billion compared to the two-day settlement period. This reduction in credit risk reflects the efficiency gained by shortening deal completion times. Brian Steele, President of Clearing & Securities Services at DTCC, highlighted the smooth implementation and early benefits of the shift. However, the costs associated with this change, estimated at $8 billion annually by Bloomberg Intelligence, underline that risks remain, albeit at a reduced level. This strategic move, which gained momentum after the 2021 meme stock frenzy, continues to be monitored for its impact on market stability and operational costs. This pivotal change not only enhances transaction efficiency but also necessitates continued vigilance in managing the associated costs and residual risks. Professionals across the finance industry should consider the implications of these adjustments on their strategies and risk management practices. https://lnkd.in/dAjxaTij

Greater transparency into the #securities settlement lifecycle could help avoid fails, especially as more markets move to T 1. Tracy Chou, Senior Securities Expert at Swift, sat down with Christine Strandberg, Head of Product Management for Investor Services Banks at SEB to discuss the problems #settlement fails cause, and what the industry can do about it. 👉 Read more: https://okt.to/AOWqNB #posttrade #capitalmarkets #sibos

ISITC EUROPE CIC T 1 research paper published last year raised the prospects of lenders withdrawal from lending. This especially in less liquid securities or Mid Cap. Stock loan recalls efficiency is fundamental to lenders lending and T 1 has significant operational and technology challenges as much as communication at the recall initiation phase. This problem is unresolved in the USA and is currently in a similar state in the UK and EU

As noted by Amanda Albright and Danielle Moran in their Bloomberg article, liquidity in the municipal market, particularly the high yield and non-rated sub-sectors, is never an issue, until it is. While Citi employees have redeployed to other firms across the municipal market landscape, the balance sheet Citi brought to the market in times of dislocation is gone. We expect opportunistic capital to fill the void when liquidity is needed by mutual funds and Citi's absence is truly felt. And likely, at significant cost to those mutual funds and other forced sellers.

Europe ‘must walk before it can run’ with T 1 Executives from The Depository Trust & Clearing Corporation (DTCC), Goldman Sachs, J.P. Morgan and AFME (Association for Financial Markets in Europe) want to see an improvement in settlement efficiency in Europe before committing to a shortened settlement cycle.  

The PRA and Financial Conduct Authority have fined Citigroup £62m for "trading control failures", reports the Financial Times this AM. A quick look at the Press Release on the FCA's website suggests that the failures were identified after a trader made a single mistake: "The trader made an inputting error while entering the basket in an order management system." The enforcement notices will be essential reading for anyone involved in creating control environments for firms involved in trading. I'm off to take a look... #trading #brokers #compliance #regulation #regulatoryaffairs