The U.S. Securities and Exchange Commission recently proposed rule changes to accelerate the settlement cycle to T+1. If the rule changes are adopted, a T+1 cycle for U.S. equities transactions could be implemented in 2024.
To help firms plan and prepare for the move to a T+1 Settlement Cycle, DTCC has launched a series of virtual forums to help clients and the industry understand the impact of the transition to a T+1 Settlement Cycle on specific DTCC processes.
Related: Discover More from the Accelerating to T+1 Series
The second event in the series, held on April 27, featured a presentation on the changes identified by DTCC and the T1 Industry Working Group to critical transaction processing deadlines. David Kirby, DTCC Executive Director, Head of Americas Relationship Management, joined Robert Cavallo, DTCC Director, Clearance and Settlement Product Management and Louis Lepore, DTCC Director, Clearance and Settlement Product Management, to discuss these changes.
“We have begun running a T+1 Health Assessment of DTCC’s services and systems so we are ready to support these proposed changes and new processes, as well as ensuring that any services that are not directly impacted by a move to a T+1 are not negatively affected by any of these changes,” Cavallo emphasized during his presentation. “We will also look for any potential opportunities to streamline processes and create potential flexibility, in the event that issues may arise.”
- The Securities Industry and Financial Markets Association (SIFMA), the Investment Company Institute (ICI), DTCC and Deloitte are currently working to create a detailed T+1 Implementation Playbook, to be released later this summer.
- DTCC is working on a white paper, targeted for year-end, that will go into much greater detail about the interconnected clearing and settlement services from its DTC, NSCC and ITP businesses, and the impact of a move to T+1. This Functional Guide will be similar to the type of document produced for clients to support the industry move from T+3 to T+2 in 2017.
- DTCC is also working on two testing documents: a DTCC High-Level Testing document, and following that, a More Detailed Testing Document, with actual test scenarios. Testing dates will be based on the industry receiving guidance from the regulators on what their recommendation is for a transition to a T+1 Settlement Cycle.
- Additional virtual sessions throughout May and June will focus on the impact of a move to a T+1 Settlement Cycle on other specific DTCC timelines and services.