Serbia was not part of the group of European markets that migrated to the T+2 settlement cycle in October 2014. However, harmonisation of settlement practice with the CSDR standard is on the agenda of the local CSD and the T+3 settlement cycle is expected to be shortened to T+2, possibly by the end of this year.

“It is worth noting that the Serbian CSD is not unfamiliar with shorter settlement cycles,” says Jasmina Radicevic, head of global securities services Serbia at UniCredit. “The possibility of settling onexchange trades earlier than T+3, subject to counterparties agreement, has been a part of the CSD’s service offering for years.”

In the past, international investors were reluctant to exercise this option, while local investors had used it on occasion to reduce counterparty risk and enable the faster reinvestment of capital. Current practice around primary auctions of longterm government debt instruments that settle on T+2 is an additional argument in favour of the potential smooth transitioning of the market to a T+2 cycle.