Solutions to address accelerating the securities settlement cycle

Accelerating the securities settlement cycle

Currently, securities settlement involves a series of mostly manual processes that are prone to risk, high costs, and operational stress. But as the industry considers moving to T+1, there are a number of potential benefits that should help strengthen the resiliency of financial markets, reduce risk, and create cost savings for firms and their investors.

The SEC has proposed March 31, 2024, as the compliance date for the T+1 transition. As the move toward an accelerated settlement cycle gains momentum, numerous market participants, including broker-dealers, investment managers, and industry utilities and vendors, are working in close collaboration to study the feasibility and impacts of this industry transition.

While the transition to T+2 settlement was viewed as “tightening the belt” for many operational processes, many consider the transition to T+1 to require significant reengineering of market and business functions, including the advent of advanced technologies.

The journey to T+1

• September 2023 – Accelerating to T+1 - Client Stratification Model
  
• September 2023 – T+1 Testing Readiness
• September 2023 – T+1 Policy and Procedures
• July 2023 – Are you T+1 ready?
• June 2023 – The Network Effect Podcast with AccessFintech
  
• May 2023 – Developing a Comprehensive, End-to-End Testing Strategy for the T+1 Accelerated Settlement Cycle
  
• February 2023 – Accelerated Settlement Cycle Placemat
  
• February 2023 – Accelerated Settlement final rule is announced by the Securities and Exchange Commission
• November 2022 – Accelerating the settlement cycle: An opportunity to modernize across the industry
• August 2022 – T+1 Securities Settlement Industry Implementation Playbook
  
• August 2022 – SIFMA, ICI and DTCC Publish T+1 Implementation Playbook as the Industry Readies for Accelerated Settlement
  
• February 2022 – SEC adopts proposal to move securities settlement to T+1 Paper
  
• February 2022 – SEC proposes new rules for shortening the securities settlement cycle to T+1

• December 2021 – Accelerating the US securities settlement cycle to T+1
• May 2021 – Accelerating the settlement cycle: An opportunity to modernize the industry
• April 2021 – SIFMA, ICI, and DTCC leading effort to shorten US securities settlement cycle to T+1, collaborating with the industry on next steps
  

Deloitte can help you prepare for a T+1 settlement cycle

There are several considerations that firms can address to prepare for an accelerated settlement cycle, and substantial changes to business practices and supporting technology will be necessary to meet the reduced settlement period.