Solutions to address accelerating the securities settlement cycle has been saved
Solutions to address accelerating the securities settlement cycle
Reimagining financial services industry operations and technology for T+1
As the industry prepares to move from the current two-day (T+2) settlement cycle to a one-day (T+1) settlement cycle, what will the impacts be for the market infrastructure and various market participants? And what will this mean for operations, risk management functions, and the role of emerging or novel technologies?
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
- August 2022 – T+1 Securities Settlement Industy 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.
We can help you prepare for T+1Contact us
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