The Gamestop frenzy highlighted the risks associated with delayed settlement (please check here for details: https://lnkd.in/dDNrFRij).
With T+1 settlement, would the story have unfolded differently?
Join us on 26th November to find out more about how T+1 impacts risk management.
We’re inviting you to a deep dive into the future of finance that’s transforming how we trade, settle, and manage risk. This isn’t just another market update – it’s about the T+1 settlement shift, and trust us, it’s game-changing for everyone, from institutional traders to individual investors.
📅 Date: 26th November 2024
🕔 Time: 12:00 CET
🌐 Platform: Zoom Webinar
🎙️ Speakers: Stephane Malrait 🌍 and Branko Petrovic
It is of essential importance in operation of all banks to explore the time duration for the transaction realization and the time period during which the bank is at risk in relation with non-realization of a contract for signed transactions. Each bank has to specify two deadlines: deadline until which the bank may unilaterally make annulment of payment orders and deadline in which it is established if the settlement was realized as per all contractual terms or the settlement was not executed in that manner.
Deadline in which the bank may annul its order may be defined as ultimate time in all regular and ordinary situations; the bank may one-sidedly change the payment order or send the instructions with delay. For example, if the bank uses correspondent bank in order to meet its part of the agreement, this deadline is the time until when a correction order may be sent to its correspondent bank, before the correspondent bank may initiate its realization.
Second deadline or the time which is established if the settlement was completed as agreed, is named as the time which starts at the moment agreed for settlement with the contracting party, and ends at the moment when the bank is safe that the settlement was realized within the anticipated time and the projected amount or some omission was made in the settlement. For example, if the bank uses correspondent bank for receipt of payment orders, this time is the time when the bank checks up the information it gets from its correspondent bank and verifies if everything is in order.
With the traditional manner of work, settlement with it brings high operational, liquidity risk, which is identical with the value of the agreed transactions. Each party is exposed to these risks, because it may fear at any moment that the counter party shall meet its liabilities.
