About the Effort
The Securities Industry and Financial Markets Association (SIFMA), the Investment Company Institute (ICI), and The Depository Trust & Clearing Corporation (DTCC) are collaborating on efforts to accelerate the U.S. securities settlement cycle from T+2 to T+1.
Working closely with members and other key stakeholders, the organizations are outlining key steps to shorten the cycle for secondary market transactions, identifying priority issues that need to be addressed and conducting the necessary due diligence and resolution of these critical issues.
The groups began discussing shortening the settlement cycle with their members in 2020 and aim to complete their analysis by the end of Q3 2021 on the next steps to achieving T+1. Shortly after that work, the organizations will develop a definitive timeframe for moving to T+1.
Recent volumes and volatility demonstrate that the time to move to a shorter settlement cycle is now. Shortening the settlement cycle will yield significant benefits, including reduced credit and counterparty risk, operational process improvements, increased market liquidity, and lower collateral and margin requirements.
In addition to their efforts to shorten the settlement time, SIFMA, ICI and DTCC will also assess what it may take to further accelerate the settlement cycle beyond T+1, and explore the role that emerging technologies could play.