03 October 2014

AFME understanding of T+2 Approach for migration on October 6

AFME members have agreed that, for the purposes transition to T+2, they will follow the approach outlined by Bloomberg and Reuters as clients require certainty about treatment of their transactions with effect from 6th October.

As per the regulation, if a transaction is executed on a MiFID venue (Regulated Market or MTF), the settlement date should be T+2 (or less), with exceptions for privately negotiated trades, trades negotiated privately but executed on a trading venue, or the first transaction where transferable securities are subject to initial recording in book entry form.

For off-venue (OTC) transactions, AFME recommends the use of T+2 as a default best practice for all transactions where possible. For transactions in XS ISINs, which are predominantly Eurobonds, AFME has been advised that a static data feed from Thomson Reuters or Bloomberg will automatically default to a settlement date of T+2 for most instruments, following the logic described below. This can be overridden if both parties agree.

This may impact XS securities traded in third countries where European Regulation is not expected to have an effect. Any refinements will be discussed and, where needed, remediated post 6^th October migration in cooperation with venues, vendors and market participants.

Full briefing note

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