Euroclear tapped HSBC yesterday (Tuesday) to supply the pricing, conversion and liquidity behind an automated FX service embedded in securities settlement. AutoFX will initially support more than 30 currencies and is due in early 2027, the companies said.
Cross-border investors must secure the currency needed to settle a purchase within a shorter post-trade window once European and UK markets switch from T+2 to T+1. Euroclear is one of the world’s two main international central securities depositories, alongside Clearstream.
The Financial Conduct Authority (FCA) said in August that two-thirds of surveyed firms did not believe their service providers were ready for the transition.
Only about half of the market participants contacted by the regulator routinely allocated and confirmed trades by the end of the trade date.
HSBC Pricing Moves Inside the Settlement Process
AutoFX will identify the currency required for a securities transaction and execute the conversion through the settlement workflow. Euroclear will provide the settlement infrastructure, while HSBC will handle FX pricing and liquidity.
Clients will receive an execution dashboard showing their currency activity. The companies also plan to offer intraday fixing points so conversions can follow settlement schedules in different time zones.
Euroclear Chief Business Officer Sebastien Danloy said T+1 “requires firms to modernise and automate their processes.” Euroclear expects the service to reduce the need for excess funding, but it provided no estimate of the amount clients could release.
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Neither company disclosed pricing, a list of supported currencies or the number of clients testing the service. The announcement also did not specify whether all currency pairs will be available when AutoFX starts.
Clearstream and State Street Moved Earlier
Clearstream made its Auto FX for Securities Settlement service effective on January 2, 2026. The product identifies eligible securities instructions and generates corresponding FX instructions with matching requested settlement dates.
The Luxembourg-based provider had already added a Settlement Dashboard and an artificial intelligence-based Settlement Prediction Tool in 2022. FinanceMagnates.com covered the earlier tools for identifying possible settlement failures.
State Street introduced another model in October 2023 as the US prepared for T+1.
StreetFX connects to Depository Trust & Clearing Corporation (DTCC) matching infrastructure. It receives settlement instructions and automatically executes the currency trade needed to fund the related securities transaction.
Euroclear is pairing its settlement network with HSBC’s external FX pricing and liquidity. Its dashboard and multiple intraday fixing points are intended to give clients a choice of execution windows rather than relying on a single conversion time.
Europe Sets One T+1 Date Across Markets
The UK and European Union have selected October 11, 2027 for the transition. Switzerland also plans to align its timetable with the two markets.
Under T+1, securities traded on covered venues must settle on the next business day instead of two business days after execution. A spot FX transaction may still follow a T+2 timetable, leaving asset managers and custodians to accelerate the conversion or pre-fund the purchase.
The FCA said firms using more automation during North America’s 2024 transition recorded better settlement performance and a smaller increase in operating costs than less automated participants. Some UK firms had yet to finalize project plans when the regulator published its August review.
The change affects several stages before settlement. Allocations, confirmations and settlement instructions must be completed earlier, while firms need enough cash or credit in the correct currency by the new deadline.
Euroclear and HSBC Extend Existing FX Work
Euroclear already offers Autoforex services that convert securities-related cash flows, income and fees. Its current settlement service monitors account activity and executes conversions, while the HSBC agreement introduces a named liquidity provider and an execution dashboard.
HSBC also operates FX Everywhere, a distributed-ledger platform used for bilateral bank transactions. FinanceMagnates.com reported that the platform had processed about $5 trillion across 13 currencies by 2023.
The bank opened that network to Wells Fargo in 2021 and added the offshore Chinese yuan in November 2022. FX Everywhere addresses bilateral FX netting and settlement, while AutoFX will source currency for securities transactions held through Euroclear.
Euroclear and HSBC did not publish a fee schedule, expected transaction volumes, named clients or an exact launch date. AutoFX is scheduled for early 2027, before the UK and EU switch to T+1 on October 11.
This article was written by Damian Chmiel at www.financemagnates.com.
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