T+1 Securities Settlement Industry Implementation Playbook

Including a detailed implementation schedule, interim milestones, and identified dependencies

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Executive Summary

In 2017, the standard settlement cycle for securities traded on the secondary markets in the United States (US) was shortened to trade date plus two business days, commonly referred to as T+2. The financial services industry, in coordination with regulators, is actively preparing to shorten the standard settlement cycle to trade date plus one business day (T+1). This transition is expected to yield numerous benefits for investors and market participants, including reduced costs, increased market efficiency, and reduced settlement risk.

The Securities Industry and Financial Markets Association (SIFMA), the Investment Company Institute (ICI), and the Depository Trust & Clearing Corporation (DTCC), together with Deloitte & Touche LLP (Deloitte), published Accelerating the U.S. Securities Settlement Cycle to T+1 in December 2021 which summarized the Industry Working Group’s (IWG) findings and industry-level recommendations for the changes necessary to migrate the securities settlement cycle to T+1. Since that time, market participants have been analyzing the impacts of T+1 within their respective organizations to identify the changes necessary and critical dependencies in order to successfully manage this transition.

This document, the “T+1 Securities Settlement Industry Implementation Playbook (Playbook),” outlines a detailed approach to identifying the potential impacts, implementation activities, implementation timelines, dependencies, and risk impacts, that market participants should consider in order to prepare for the impending transition to a T+1 Settlement Cycle. Firms should use this playbook as a guide to identify the areas impacted by shortening the settlement cycle and the various considerations that should be contemplated. Every firm has a different infrastructure, different businesses, clients, as well as operational process and geographies which all need to be taken into consideration. The Playbook contemplates a possible transition to T+1 in the third quarter of 2024; however, the actual T+1 transition date will be subject to regulatory approval, including final SEC rules concerning the shortening of the securities settlement cycle.

The Playbook consists of fourteen sections. The first two sections provide overviews of the previous T+2 settlement cycle initiative and the approach taken for the Playbook. The next eight sections of the Playbook describe Trade Processing, Asset Servicing, Documentation, Securities Lending, Prime Brokerage, and Funding and Liquidity Considerations. The remaining sections describe considerations for Regulatory Changes, Additional Considerations (i.e., Global Considerations, Primary Offerings, Buy Side Considerations, etc.), Industry Testing and Migration Plans, and associated resources for market participants to prepare for the transition to T+1.

About the Report

This document outlines a detailed approach to identifying the impacts, implementation activities, implementation timelines, dependencies, and risk impacts, that market participants should consider in order to prepare for the impending transition to a T+1 Settlement Cycle. Firms should use this playbook as a guide for market participants to identify the areas impacted by shortening the settlement cycle and the various considerations that should be contemplated. Every firm has a different infrastructure, different businesses, clients, as well as operational process and geographies which all need to be taken into consideration.

Questions?

Media Inquiries: Katrina Cavalli | 212.313.1181
Industry Inquiries: Anthony Macchiarullo | 212.313.1378