(Bloomberg) -- It’s “imperative” that the $7.5 trillion-a-day currency market prepares for next year’s shift in how US equity trades will settle, said Anna Nordstrom, who heads domestic and international markets functions for the Federal Reserve Bank of New York’s markets group.

That switch in May will cut in half to one day the time it takes equity transactions to settle in the world’s biggest stock market, in a practice known as T+1. It will leave US stocks out of step with foreign exchange, where trades typically take two days to complete.

Read more: Wall Street Need for Speed in Stocks Reshapes FX World

In prepared remarks for FX Markets USA 2023, an industry conference in New York on Tuesday, Nordstrom said market participants will need to analyze their practices to avoid disrupting market functioning.

“This transition will require significant preparation in the FX market given time zone differences, mismatched operating hours, and the diversity of existing settlement and confirmation processes, many of which rely on manual procedures,” she said. 

Market observers have spoken of potential ripple effects in recent months, such as longer hours for currency traders in New York and rising volumes in Asian mornings.

“Stakeholders may also need to make substantial improvements to their existing operational systems and reconfigure FX settlement processes,” Nordstrom said. “I strongly encourage you to begin reviewing and updating your operations and settlement processes now to avoid potential difficulties later.”

Nordstrom spoke as the Global Foreign Exchange Committee, which is comprised of central bank officials and market participants, is gearing up for another review early next year of the FX Global Code.

The committee introduced this set of voluntary principles in 2017 following market-rigging scandals in currencies that triggered multi-billion dollar fines. 

Nordstrom said that the Global Foreign Exchange Committee distributed a survey, which closes Wednesday, seeking feedback on the code’s effectiveness, the impact of a previous review in 2021 and priorities for the next reassessment.

In 2021, the group published updates to the code of conduct that included strengthening guidance for those operating on anonymous trading platforms. 

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