The sector has had to address plenty of new developments in recent years. Increased sustainability requirements, the democratisation of alternative investments and changes in the settlement of transactions are examples of the changes to which the industry has had to adapt.
Looking ahead to the coming months, Aurora Cuadros, Corporate Director of Securities Services at Cecabank, highlights the challenges that the industry will have to face, including the ECMS Project of the Eurosystem Central Banks, the so-called Reform 3 of the Spanish market, the change from T+2 to T+1, the new Securities Market Law, and the MiCA and DORA regulations.
In chronological order, the first of these are the changes relating to the inclusion of the Tax on Financial Transactions in the Economic Agreement with the Autonomous Communities of the Basque Country and Navarre, and the consequent modifications to the current service that Iberclear is providing in relation to the Tax on Financial Transactions. The entry into force of the European ECMS and SCORE projects was initially scheduled for April, but this has been delayed and is now expected to take place on 18 November 2024.
The purpose of the ECMS project of the Eurosystem Central Banks is to create a single platform shared by the different central banks, replacing the existing local collateral management systems. Closely related, the SCORE Project aims to harmonise collateral management standards and rules, with a very relevant impact on the management of corporate events.
At the national level, by the end of October 2024 we have scheduled the so-called Reform 3 of the Spanish market, the objective of which is to achieve full harmonisation of settlement processes with European standards, which implies, among other relevant associated impacts, the reversion of the PTI.It is more than likely that the delay of ECMS and SCORE will have an impact on the dates of Reform 3, in order to avoid the overlap between the two projects in October and November 2024. In this regard, the entry into force of Reform 3 has a safety margin or buffer that would allow it to be moved to the first few months of 2025.
Halfway between regulatory and operational, by May 2024 we will also see the shortening of the settlement cycle in the American and Canadian markets from T+2 to T+1, which will entail new challenges due to the shortening of the time available for all post trading related activities. And as if that were not enough, we will also have to deal with different T2S Releases along the way.
Our objective in the face of all these regulatory changes is to provide security and comfort to our customers, to act as a buffer so that they suffer as little impact as possible, trying to take on all the adaptation tasks that are regulatory possible and allowing them to focus their efforts on the aspects most related to their business.
