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Mutual Funds Enhancements Help Clients Navigate T+1 Environment

By DTCC Connection Staff | 2 minute read | May 17, 2024

As we rapidly approach the industrywide conversion to T+1 on May 28, 2024, DTCC’s Mutual Fund Services team will be implementing a suite of updates to their services to accommodate the shortened settlement cycle. T+1 represents a complex, multi-faceted transition that impacts virtually every part of the financial services industry, including DTCC’s Mutual Fund Services.

Related: Strengthening T+1 Business Response Plans

Maximizing the Processing Window

As a primary update to Mutual Funds services, DTCC’s National Securities Clearing Corporation (NSCC) will systematically update the Fund/SERV system for securities with a settlement cycle of T+2 to T+1, effective May 28, 2024. In addition, T+1 securities with a USN Currency Code will also be updated to a USD Currency Code.

For securities in the Fund/SERV system, the Currency Code determines the timing of when a confirmed transaction is staged for settlement and determines when corrections, firm exits and reconfirmations can be made. T+1 securities with a USN Currency Code must be confirmed by 8:00 p.m. ET on the day the trade is submitted (T), while T+1 Securities with USD Currency Code must be confirmed by 11:00 a.m. ET the next business day (T+1).

The conversion of all T+1 securities to a USD Currency Code will help to maximize the window for intermediaries and funds to make trade confirmations and correction processing in the shortened settlement cycle.

Options for Corrections Processing

“We are continuously evaluating our products to find areas of opportunity to enhance our clients’ experience, which is especially important with T+1 settlement cycle quickly approaching,” said Josephine Torelli, DTCC Executive Director, Mutual Fund Services. “One of the main challenges for our clients in a shortened settlement cycle will be the limited time they have to perform any correction processing under a T+1 environment.”

To address the limited processing time, DTCC’s Mutual Funds team outlined options available for intermediaries and funds in the event a Fund/SERV trade needs to be corrected or canceled. These options include corrections, firm exits, fund deletes and reconfirmations.

In addition, the inclusion of Fund/SERV Security Master Information into Profile Security provides clients with increased transparency and access to important operational information when identifying whether a security allows a firm exit in the event a trade needs to be canceled, as well as other key data to facilitate order and correction processing, essential in a T+1 environment.

For more information regarding this enhancement, Mutual Fund clients can reference Important Notice a9397 or contact their Relationship Manager for further guidance.

Josephine Torelli

DTCC Executive Director, Mutual Fund Services