HSBC and Euroclear Launch AutoFX for T+1 Settlement

HSBC and Euroclear announced a new automated foreign exchange service called AutoFX last week. The service is built to address the compressed timeline for settling cross-currency securities trades when Europe shifts to a T+1 settlement cycle on 11 October 2027.

T+1 means a securities trade settles one business day after execution, replacing the current two-day T+2 standard. The change compresses the window for all post-trade activities, including confirming trades, sourcing liquidity, and converting currencies to fund cross-border transactions. Missing the foreign exchange conversion window under T+1 can cause a trade to fail, an outcome that is both costly and damaging to an institutional investor's reputation.

How AutoFX Works

AutoFX links Euroclear's settlement infrastructure directly to HSBC's foreign exchange pricing, conversion, and liquidity desks. This integration embeds the execution of currency trades within the settlement process itself, eliminating it as a separate manual step. The service is scheduled to launch in early 2027 and will initially cover more than 30 currencies.

Clients will get access to a real-time execution dashboard. They will also have access to intraday foreign exchange fixing points timed to settlement schedules across different time zones. The service includes liquidity optimisation features designed to reduce excess funding requirements.

Sebastien Danloy, Euroclear's chief business officer, described the move to T+1 as "one of the most significant changes to Europe's post-trade landscape in decades." He stated that the partnership with HSBC helps clients "improve settlement certainty and confidently adapt to a faster settlement environment."

The Competitive Landscape for FX Automation

AutoFX is not the first service of its kind. Euroclear's main rival, Clearstream, launched a comparable offering called Auto FX for Securities Settlement on 2 January 2026. That service automatically links client securities instructions to Clearstream's own foreign exchange platform, with synchronised settlement dates.

State Street was earlier still with its StreetFX platform, launched in October 2023 ahead of the North American T+1 shift in May 2024. StreetFX connects to the DTCC's trade-matching system and automatically executes the foreign exchange needed to fund a matched securities trade at the client's next scheduled window.

Large custodians like BNY Mellon and State Street have long used standing instructions for foreign exchange, a model based on pre-agreed client rules that allow for automatic execution. The pressing T+1 deadline, however, has pushed this existing model into dedicated, purpose-built infrastructure. The old buffer for manually resolving foreign exchange issues has effectively vanished.

The launch of AutoFX confirms the industry trend of moving foreign exchange execution inside the settlement pipeline itself. It is no longer a separate step sitting alongside the core process.