Reported 4 months ago
The move to next-day settlement for U.S. securities trading poses challenges for ETFs and marketmakers due to jurisdictional requirements and capital needs. This shift to a shorter settlement period aims to reduce risk and increase efficiency but may temporarily increase transaction failures for investors. Issues arise when there is a mismatch in settlement schedules between ETF wrappers and their holdings traded outside the U.S., impacting asset managers with European holdings the most. Market participants will need to address these challenges by adjusting to the new settlement rules and ensuring timely creation of ETF baskets.
Source: YAHOO