“State Street is helping to drive solutions that address critical performance drivers by rolling out an automated FX execution solution to facilitate the U.S. securities market’s transition to T+1 settlement.”
State Street Corporation has taken a significant step forward in preparing the market for the transition to a T+1 settlement cycle in U.S. equities, scheduled for May 28, 2024.
The firm announced the integration of its foreign exchange (FX) trading service, StreetFX, with the Depository Trust & Clearing Corporation’s (DTCC) Institutional Trade Processing (ITP) and central trade matching platform, CTM.
Streamlined FX lifecycle and faster, no-touch post-trade processing
The collaboration allows StreetFX to receive settlement instructions for match-agreed transactions from DTCC’s ITP. This enables automatic execution of the requisite FX trades to fund the purchase or sale of related securities transactions, streamlining the FX lifecycle and facilitating faster, no-touch post-trade processing.
“State Street is helping to drive solutions that address critical performance drivers by rolling out an automated FX execution solution to facilitate the U.S. securities market’s transition to T+1 settlement,” said Tony Bisegna, Head of State Street Global Markets.
The move to a T+1 settlement cycle will effectively reduce the counterparty risk by shortening trade cycles for investors. “This innovative advancement is another example of State Street’s commitment to providing industry-leading firsts to our clients,” added Bisegna.
StreetFX is a fully-automated Benchmark Foreign Exchange execution platform
DTCC, the premier post-trade infrastructure for the global financial industry, sees this collaboration as a crucial step in aiding the market’s transition to a T+1 settlement cycle. “CTM’s open architecture enables us to work with multiple firms within the industry to support the industry’s move to T+1 next year,” said Val Wotton, DTCC Managing Director and General Manager, ITP. “We look forward to working with a broad range of market participants over the coming months to help them prepare for a seamless transition to T+1.”
StreetFX is a fully-automated Benchmark Foreign Exchange execution platform designed to increase transparency and efficiency in FX trading. It integrates within clients’ existing infrastructure to provide an end-to-end solution that increases consistency and minimizes operational risk. On the other hand, CTM serves as a central matching platform used globally across multiple asset classes.
The joint effort by State Street and DTCC comes at a crucial time as the market gears up for the major shift to T+1 settlement. By automating the FX trading process and shortening settlement times, the collaboration not only streamlines operations but also fortifies the market’s infrastructure, setting a new industry standard for efficiency and risk management.
