Citi Securities Services Evolution 2025

42 | Securities Services Evolution 2025 Asia Pacific T+1: Asia’s own journey With the world’s attention focused strongly on North America’s T+1 transitions in 2024, it is easy to overlook the fact that Asia Pacific’s path towards accelerated settlements began over a decade ago with China’s move to T+0 in 2014 and India’s phased transition to T+1 (and then optional T+0) from2023. With the region’s two largest markets now operating on T+0 or T+1 and Asia’s largest outboundmarket (the US) now running on T+1, the impact of accelerated settlements was already being felt strongly by Asian firms, well in advance of this year’s announcements in Europe and in Asia. That 38% of Asian respondents are still focused on T+1 in 2025, even with somuch of the work behind them, underlines the sheer scale of the multiple T+1 projects on the horizon, each with its own unique local and regional specificities. As our recent “Accelerated Settlements in Asia” report 71 highlighted, this is a journey with many steps. Beyond the optimization of processing for North American T+1 and preparations for European T+1, the region is also putting its own transition dates in the global calendar. Australia and New Zealand are expected to migrate around 2030 (post the implementation of the ASX CHESS 72 replacement expected to be 2029), and market consultations are now ongoing in Hong Kong, Japan, Malaysia and Singapore (with likely transition dates to be announced over the coming year). What will be different for these markets – versus what we have already seen? Whilst many of the core requirements will be consistent with experiences to date, a number of differences risk presenting themselves across the 17 markets that make up the region. Chief amongst these are the mandatory buy-in and penalty regimes in a number of Asian markets, which ensure settlement efficiency rates of over 99% in many key markets today. Indeed, 13% of Asian respondents see settlement discipline as the most impactful industry dynamic of all in 2025. These rules risk making T+1 a costly endeavor for any firms that cannot manage same-day settlements. Added to this are the midday settlement cut offs in a number of markets (such as Australia and Singapore), which make any settlement-date activity (and remediation) impossible for global investors that don’t have onshore presence in the region; and then a broad lack of automation tools to support confirmation and allocation matching at market level. Added together, these unique considerations look set to pose significant challenges for those investing into or trading Asia’s wide range of markets. DLT and digital assets: The first T+1 transitions in 2029 are still several years away – and much progress is being made in other areas today, most of all in the digital asset space (which is seen as most impactful by 15% of respondents in Asia Pacific, growing year on year). Since the inception of digital assets, Asia Pacific has led the path of adoption thanks to extensive retail take up of cryptocurrencies and to visible leadership by regulators (such as those in Singapore, Hong Kong, Thailand and others). Today, many of these regulatory efforts are paying dividends as live projects move into deployment across the region. Cryptocurrency markets have continued to grow, with institutional banks now offering digital asset custody for a range of global and Asian assets. Aiming to tap into the digital wallets that hold these digital assets, fund houses such as UBS 73 , Wellington 74 and China AMC 75 have all launched tokenized funds and tokenized Accelerated settlements Settlement efficiency Replacement of FMI legacy technology platforms Adoption of Generative AI* Adoption of digital assets Increased shareholder participation and governance Automation of asset servicing Mandatory fixed income clearing Resiliency Figure 22: Most significant changes in the Asia Pacific post-trade space today Expressed as: % of respondents in Asia Pacific citing each change, excluding others. *New category in 2025. 21% 28% 39% 10% 13% 15% 16% 8% 2% 6% 11% 17% 11% 14% 13% 7% 8% 4% 7% 1% 5% 4% 2023 2024 2025