Global technology services provider GBST has announced it is ready to meet the challenge of the impending T+2 settlement regime for the Australian equities market.

Global technology services provider GBST has announced it is ready to meet the challenge of the impending T+2 settlement regime for the Australian equities market.

According to GBST, the ASX has set a target date of March 7 this year for the roll out of a T+2 settlement cycle for cash equities, which is aimed at accelerating market efficiency and keeping Australia “at the forefront” of global best practice.

Denis Orrock, Chief Executive of GBST Capital Markets, said that GBST has conducted “early and comprehensive research” into settlement cycle developments and this has allowed the securities transaction software provider to brace itself for the transition.

“GBST SharesTM is the most widely used back office platform in the Australian equities market, and we are proud to be showing our continued commitment to Australian market participants,” he said.

A 2014 white paper produced by GBST in conjunction with the Stockbrokers Association of Australia examined the benefits of introducing shorter equities settlement timeframes in Australia – such as a reduction in risk exposures, an increase in market liquidity and further alignment of the local market with international best practice.

Shorter timeframes are also seen to allow for the potential to reduce the amount of regulatory capital required to cover unsettled counter party exposure between the broker and their clients.

Whilst the Australian market compares favourably with offshore markets in terms of settlement efficiency, GBST confirmed that the introduction of regular margin cover for outstanding net obligations between brokers and the central counter party was “a major contributing factor” towards reducing the settlement period to T+2.

Orrock said the reduction of the settlement period has also been adopted as part of the forward work program of the ASX Forum.