Shortening the Settlement Cycle

Market resiliency is a top priority for SIFMA and its members. Enhancing our securities settlement process is critical to the continued resiliency of our markets and market operations.

In 2017, SIFMA, along with DTCC and ICI, led the effort to shorten the settlement cycle from three to two days (T+2), which required addressing multiple functions and rules.

On February 24, 2021, the Depository Trust & Clearing Corporation (DTCC) released a whitepaper, outlining a two-year approach to shortening the settlement cycle for U.S. equities to one business day after the trade is executed (T+1). Similar to 2017, when the industry transitioned to T+2, moving forward on both the integrated settlement model and moving to a T+1 settlement cycle will be a substantial undertaking requiring broad industry actions.

As discussions on the industry’s securities settlement processes continue, including the business and operational impacts on any future changes to shortening settlement times to T+1, SIFMA believes it is essential to ensure that plans allow for a sufficient amount of time to successfully accomplish further changes – particularly in light of other industry operational obligations such as the Consolidated Audit Trail (CAT).

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