Citi Securities Services Evolution 2025

12 | Securities Services Evolution 2025 Issuers: the future of FMIs? “SIU will open opportunities for the issuers. The key question will be which market do I issue into?” Isabelle Delorme, Head of Product Strategy & Innovation, Euroclear Growing competition at the settlement level means that the battle has shifted to the issuer. Tomorrow, if settlements can truly be managed anywhere, then the issuance location will be a core determinant of asset servicing and registry activities. In Europe today, issuers’ choices of listing FMI determine the portability of the security for settlement (based on local rules and regulations) and hence the amount of competition that is possible. Soon, the ability of FMIs to deliver new value in the shareholder chain and to continue to generate margin from asset servicing activities will depend on their issuer relationships. But who owns that relationship with issuers? Our 2024 report highlighted the parallel ambitions of transfer agents and CSDs in the issuer space. In 2025, increasing competition has renewed CSDs’ focus on how they can encourage issuance, driving an expansion of issuer-centric capabilities (including new account structures, shareholder engagement capabilities and operational efficiency). FMIs are increasingly aware that issuers are the key to their future revenue-streams and are acting today to incorporate them into their development agendas. Accelerating settlements: much more than T+1 “T+1 is not the destination. It is a step on the way to faster and more automated settlements.” Andrew Douglas, UK Accelerated Settlements Taskforce If there is one certainty in the post-trade industry in 2025, it is that the securities trade cycle is changing beyond recognition. T+1 (and T+0 in China and India) triggered a new, global discussion on the optimal model for settlement processing. In 2025, the introduction of 24/5 clearing (in the US) has combined with growing adoption of crypto-assets in many of the world’s largest economies to drive a more profound reevaluation by many FMIs of how they enable trade settlement today. Whether driven by a desire to reduce credit and market risk (as we saw in the US), to drive regional standardization and liquidity (as the European Commission’s Savings & Investment Union 5 (SIU) aims to do) or by the need to keep step with the real-time availability of crypto-currencies (as we see in Asia), settlement models are changing profoundly. They are rapidly evolving from two- day, batch-based processes that can be managed comfortably anywhere in the world, to real-time based processes that require seamless and frictionless flows of data across the globe. This transformational shift is creating new pressures on FMIs to transform their current process flows and platforms in ways that move well beyond T+1. “T+1 means that a CSD has to operate 24/7 – or at least 21/5 – to serve global investors.” Carlos Albuquerque, Managing Director, Head of CSD, B3 How FMIs are enabling and supporting these information flows remains both a core challenge and an opportunity. On the one hand, FMIs must ensure that changes to trade flows be managed with no downstream impact on trade fails across the market and with no new pressures on ancillary processes (such as asset servicing). At the same time, the opportunities to add new value (and derive new revenues) from innovative services in middle office matching , funding , securities lending and predictive error handling are growing rapidly. In 2025, FMIs are under growing pressure to balance these responsibilities and opportunities, not only to ensure market resilience but to make sure that they are ready to win business from their peers as competition grows. “Follow the sun trading is clearly emerging – but we [the CSD] will follow the market needs for now in making it happen.” Hong Jin Kim, Director, Global Market Department 2, Global Services Division, Korea Securities Depository