Britain and Ireland move early to shorten stocks settlement
LONDON Dec 2 (Reuters) - The mandatory settlement time for share trades in Britain and Ireland will be cut by a day from October next year to pre-empt new European Union rules aimed at improving market efficiency, settlement house Euroclear said on Monday.
Settlement of a share trade, whereby ownership is switched for cash, currently takes up to three days after the actual transaction on an exchange, a process known as T+3.
EU rules being finalised will cut this to two days (T+2)from January 2015 to end a patchwork of settlement times across Europe.
Euroclear said the early move was backed by the Bank of England and Britain's Financial Conduct Authority.
The change will affect all share trading on the London Stock Exchange, BATS Chi-X Europe, the Irish Stock Exchange and LSE's Turquoise platform.
"We will work with the market on the coordination and customer communication required to affect this move," Alexander Justham, the London Stock Exchange chief executive, said.
Euroclear already offers settlement of trades in real time if both sides of the trade agree to do so. Trading platforms that use Euroclear's Belgian, French and Dutch arms will also settle on a T+2 basis from next October.
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