What are the settlement trends reshaping EMEA markets?
The scheduled shift to a T+1 settlement cycle in the UK, EU, and Switzerland by October 2027 will challenge the securities finance ecosystem. While this shift aims to boost settlement efficiency, it is far from straightforward.
European markets face operational, regulatory and infrastructural fragmentation, a consistent issue. The UK is likely to transition to T+1 before the EU and Switzerland, which could create visible discrepancies.
Key operations like recalls are still handled manually, often relying on email notifications.
Platforms like Murex are stepping in to streamline these inefficiencies and support seamless adaptation through proactive solutions.
How has Murex supported clients in adapting to T+1 settlement cycles?
Across the US, Canada, and Mexico, Murex clients have already experienced the benefits of sophisticated T+1 solutions. Designed to support multiple ISINs and settlement timelines ranging from T+1 to T+5, Murex’s adaptable software helps businesses to flexibly manage and avoid the pitfalls of this fragmentation.
As the industry eyes Europe and challenges ahead, what I want to highlight is that the complexity in the European market — multiple central securities depositories (CSDs), divergent regulations and infrastructure needs, for example — makes this transition more intricate. That is why our software is designed to minimise operational friction and ensure our clients operate seamlessly across the UK and EU.
What impact will Basel IV regulations have on the securities finance industry?
The forthcoming Basel IV regulations are set to impact capital markets and the securities finance industry significantly. These regulations aim to enhance the quality and quantity of bank capital, improve liquidity requirements and reduce leverage. The regulations aim to foster a more resilient banking sector. Banks need to be prepared and equipped to comply with regulations.
With stricter capital requirements and standardised risk assessments, effective collateral management becomes even more important. Software providers must offer solutions that optimise the use of collateral and ensure high-quality assets are utilised efficiently to meet regulatory requirements.
Additionally, enhanced risk management capabilities are crucial for complexities introduced by Basel IV. Software solutions must offer real-time visibility into positions and exposures, enabling firms to manage risks more effectively and make informed decisions.
What regulatory changes are shaping the securities finance market?
Several key regulatory changes coming into effect by 2027 will redefine the securities finance market.
The mandatory clearing of US Treasuries is set to come into effect in December 2026 for cash transactions and June 2027 for repo transactions. This will require robust systems to manage membership, liquidity and legal agreements — the aim is increased market resilience.
In the US, the emergence of sponsored repo and agent clearing models is reshaping the market. These models facilitate central clearing, with sponsored services supporting ‘Done-With’ trading and agent clearing supporting ‘Done-Away’ trading.
Then, there is the need to meet the US Securities and Exchange Commission (SEC) compliance obligations to avoid litigation and ensure market stability.
This initiative is likely to influence European markets, as regulators consider similar measures to enhance market stability. Initially prominent in the US, sponsored repo models are also gaining traction in Europe.
And European ESG regulations are in flux. The European Commission is amending sustainability due diligence and reporting requirements under the Corporate Sustainability Due Diligence Directive and the Corporate Sustainability Reporting Directive.
Additionally, the Japan Securities Clearing Corporation (JSCC) has been pivotal in clearing and settlement processes enhancement. By assuming obligations from participants and providing settlement guarantees, JSCC ensures efficient and secure trading.
Regulatory frameworks will evolve to accommodate the unique risk profiles of tokenised assets as they become more commonplace. Digital assets offer enhanced intraday funding and cross-currency trade capabilities, key to T+1 settlement.
In the UK, the Financial Conduct Authority (FCA) is expected to finalise rules on cryptoassets by 2026, including regulations on stablecoins, custody, and prudential rules. This will shape how assets are integrated into traditional financial systems. Regulatory clarity will lead to increased participation in the crypto market.
Murex is ahead of the curve. We are enhancing offerings across risk management, collateral optimisation, and regulatory compliance. We are enhancing our partnership with leaders on tokenised assets funding and new models of clearing. We ensure our clients are fully equipped for the coming changes.
How are technological developments transforming collateral management?
The collateral management landscape is being massively impacted by advancements in AI, machine learning, and digital asset integration.
Digital assets are creating exciting opportunities in securities finance. The introduction of tokenised assets backed by real-world securities offers enhanced intraday funding and cross-currency trade capabilities — both critical to T+1.
As opportunities grow, so do complexities. Inventory management is an example. Differentiating between tokenised and traditional assets within your inventory is now a pressing concern. Murex’s MX.3 platform provides the visibility and control that firms need to monitor risk, track ownership and manage collateral seamlessly.
What trends will define securities finance in 2025?
We see increasing demand for synthetic risk transfer trades. This trend is gaining traction among investment banks and buy side firms equally, and this is likely a defining trend for the year. Additionally, the use of fixed income bond replica total return swap (TRS) or standardised TRS on iBoxx or total return futures are becoming more prevalent. These instruments enable investors to efficiently gain or hedge exposure to the profitable indices, corporate bond and leveraged loan markets, benefiting from strong liquidity or standardised trading structures, or a combination of the two.
MX.3 helps firms accurately calculate risk and manage the lifecycle of these trades, ensuring seamless integration and compliance with evolving market standards.
I have already mentioned the growing adoption of digital assets. This is not an upcoming trend — it is happening now. Tokenised assets will soon become a standard part of the securities finance market. Murex solutions are ready to support this transformation.
Why is advanced technology essential for securities finance today?
The need for streamlined, scalable, flexible technology has never been greater. The days of manual processes and siloed systems are over. Firms need comprehensive software solutions that adapt to changing settlement cycles, integrate collateral of all kinds and automate regulatory compliance.
MX.3 is designed for this. The platform supports securities borrowing and lending, repo, and TRS. It enables firms to properly manage and monetise the balance sheet, centralise operations, improve efficiency and unlock new revenue streams, all while remaining compliant with evolving regulations.
How can firms stay ahead in the evolving securities finance markets?
By embracing innovation, automating workflows, and adapting to regulatory changes, firms can stay ahead of the curve with the right tools they need to thrive in this dynamic landscape.
We are well into 2025 and uncertainty has been a common feature. The demand for robust software solutions is clear.
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Maciej Trybuchowski
Image: Sabine Farhat 
