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Introduction and Executive Summary

This paper presents The Depository Trust & Clearing Corporation’s (DTCC) preliminary analysis of shortening the settlement cycle for U.S. equity1 trades from the current trade date plus three business days (T +3) to T+2 or T+1 and seeks further input from the industry to serve as the basis for a more comprehensive cost-­‐benefit analysis to explore the case for making this change.

In 1995, the U.S. equity settlement cycle was reduced from T+5 to T+3. This was achieved through automation and technological improvements and provided the industry with increased straight-­‐through processing as well as reduced risk. Further shortening the settlement cycle would reduce a number of risks and capital requirements, and both are key areas of current industry regulatory focus.

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