Skip to main content

Applauding the SEC’s Proposal to Accelerate the Settlement Cycle to T+1

By Murray Pozmanter, DTCC Managing Director and Head of Clearing Agency Services and Global Operations | February 15, 2022

We are very pleased to hear that the U.S. Securities and Exchange Commission (SEC) unanimously voted to shorten the settlement cycle for securities to T+1 by March 31, 2024.

DTCC supports the move to T+1 because it will deliver significant benefits to the industry and to investors by reducing risk, lowering margin requirements and improving capital liquidity, all while maintaining the resilience and soundness of the U.S. capital markets.

Related: Why Moving to T+1 Is a Win for Investors

In support of this, we’ve partnered with SIFMA, Investment Company Institute, and hundreds of market participants from a broad cross-section of the industry to issue an industry roadmap that details plans to move to T+1 by the first half of 2024. DTCC is also working closely with our clients to further automate, streamline and accelerate their post-trade processes, including the allocation/confirmation/affirmation process.

While DTCC already clears and settle transactions on a same-day or T+0 basis – with over 1 million same-day transactions processed each day – introducing T+0 across the industry would be a significant undertaking that would require foundational changes to the way securities trade and settle today. While we believe the industry should continue to aspire to same-day settlement, it is more pragmatic to reduce the settlement cycle in stages.

In anticipation that market structure will continue to evolve, we are currently working with the industry to explore a netted T+0 end of day settlement cycle as part of our Project Ion initiative. The Project Ion platform would be capable of supporting T+2, T+1, T+0, and extended settlement cycles, providing the flexibility to meet the needs and settlement timelines across market participants.

As we move forward, we will continue to work with SIFMA, ICI, and the industry to execute on our goal of moving to T+1 in 2024. We invite you to check out UST1.org to stay up-to-date with our industry T+1 efforts.

Murray Pozmanter DTCC Managing Director and Head of Clearing Agency Services and Global Operations

dtccdotcom