Planning for Fedwire’s Expanded ACAP Service

The Fedwire Securities Service Automated Claim Adjustment Process (ACAP) currently offers the capability for participants to automate claim adjustment payments via fail tracking, interim accounting and repo tracking on mortgage-backed securities using the Automated Claim Adjustment Process (ACAP).

The expansion of ACAP will introduce securities lending tracking across all coupon-paying securities issued on Fedwire Securities and expand asset types eligible for fails tracking to all coupon-paying securities issued on Fedwire Securities. These enhancements will be available beginning October 6, 2025.

For further information on the specifics of the ACAP enhancements, including the scope of the enhancements, technical requirements, and testing and implementation timelines, please refer to the Federal Reserve Financial Services’ Automated Claim Adjustment Process (ACAP) Resources and Implementation Center here.

Additionally, a direct link to details regarding customer testing for ACAP in the Fedwire Securities Depository Institution Testing (DIT) environment can be found here:  Automated Claim Adjustment Process (ACAP) Depository Institution Testing

The table below depicts the full scope of ACAP eligibility beginning October 6, 2025:

• Firms are able to automate existing manual claims processes to exchange income in the event of fail to deliver or repo transactions.
• Beneficial owners secure payments due faster though automated claims reducing their risk to the counterparty of the transaction and improving their liquidity position.

SIFMA is coordinating an industry effort to plan for the launch of the expanded ACAP service. We have formed a regular working group drawing on broker-dealers, asset managers, custodians, and key vendors and third parties to discuss the preparations for the launch of the expanded functionality.  Please contact Charles DeSimone if you would like to be involved.

The Federal Reserve Financial Service Banks has confirmed that implementation code for of Phase 2 ACAP enhancements take place on October 6, 2026.

PLEASE NOTE: The industry working group is still determining when they will be ready to use new ACAP functionality for securities lending transactions.  As such, SIFMA will recommend market participants NOT BEGIN TO USE SECURITIES LENDING CODES IN OCTOBER 2025. Instead, SIFMA is working with the industry to identify a later go-live date which the industry can support.  We tentatively expect this new SIFMA industry adoption date will be in Q2 2026. SIFMA will formally announce our recommended industry go-live date in summer 2025.

SIFMA recommends that firms begin to use the fail tracking functionality for the new ACAP eligible securities types when available on October 6, 2025.

While the new ACAP offering will provide additional functionality and allow for more efficient operations in the future, industry planning and coordination are necessary to prevent any operational disruptions during the implementation process.

Two key issues the industry is facing are:

• The communication of the new service functionality to clients and counterparties with agreed standards to ensure universal adoption, and
• How to handle in-flight transactions (i.e., existing on-leg loans) which have a close leg following the go-live date. Coordination between all industry participants will be required to ensure Stock Loan  positions are in alignment across firms to prevent settlement rejects post go live.

The industry will get the greatest benefits from securities lending tracking on ACAP if adoption is universal across users. If adoption is not universal at launch, firms could face fails and operational challenges if some clients and counterparties do not adopt the new functionality even as the bulk of the industry does. SIFMA recommends that, as a best practice, all users plan to adopt the new functionality on the SIFMA recommended industry adoption date.

All Firms should be aware that ACAP tracking is driven by the delivering party, so a firm can still be impacted by ACAP events if they are not themselves transmitting the messages and will receive the adjustment credits/debits and associated messages.

We encourage all users to inform clients and counterparties that you will be using the new ACAP functionality and where you handle transactions on behalf of clients, to work to have them opt-in before go-live / the SIFMA recommended industry adoption date:

• For fails tracking, inform clients that adoption will begin on October 6, 2025 Fedwire securities go-live date
• For securities lending tracking on the SIMFA recommended industry adoption date (likely Q2 2026)

SIFMA is developing model language to communicate this opt-in to clients, which we will post here when complete.

When the expanded securities lending ACAP functionality is adopted by the industry, market participants will have a number of in-flight transactions (i.e., existing on-leg loans) which have a close leg following the go-live date. As a result, firms may face operational challenges if, following go-live, new transactions use the tracking functionality while a remaining group of close-leg transactions does not. The resulting mismatch has the potential to cause significant settlement fail issues for market participants as they update their trade matching logic to include the ACAP tags. These matching issues would need to either be managed as exceptions on a consistent basis until they are closed out, or would need to be modified to add tracking on the close-leg to bring them into harmony with the rest of the transactions.

SIFMA’s current recommendation is that the industry work to modify these close-leg transactions to add tracking functionality to avoid operational complications. However, currently, there is no functionality to allow for bulk conversion of these close-leg transactions.