Optiver Central Risk Book – Could motivate Why Risk

Optiver has built a central risk book that collates deltas from our internal market-making desks,
which we leverage to offer two-way pricing in over 1,600 equities to buy-side firms. Our ability to
hedge and offset risk across options, ETF and futures positions means we can passively unwind
positions and limit market impact. We work with the major order and execution management system
providers to supply transparency on pricing and establish a fully-automated straight-through process.

T+1 Settlement in Europe

Optiver is advocating for Europe to adopt a T+1 settlement period, following recent moves by the US
and other countries. The T+1 settlement reduces the trade settlement period to one day, which is
expected to lower risks in the financial system, streamline settlements, and enhance market
efficiency. Europe previously led the shift from T+3 to T+2 settlement in 2014, and the US followed in
2017. Now, with the US Securities and Exchange Commission (SEC) proposing a move to T+1 by May
2024, Optiver suggests Europe should also make this transition to remain competitive.

However, Optiver cautions that the fragmented nature of European markets presents unique
challenges for implementing T+1 settlement. Concerns include more complex cash management for
trades with foreign exchange components, reduced time for resolving processing errors, potential
initial increase in delayed or failed trades, and complications in depot switches for securities traded
in multiple jurisdictions. To address these issues, Optiver recommends a coordinated approach by
authorities, considering harmonized exemptions for market makers and efficient processing times for
depot switches. They also emphasize the importance of cooperation between EU, UK, and
Switzerland to maintain the competitiveness of Europe's capital markets. Optiver's insights are part
of its broader focus on improving market structure and stability through technology and liquidity
provision.

One of the main risks with T+1 settlement involves risks to the clearing process:

https://optiver.com/explainers/central-clearing-an-essential-post-trade-function/