The Depository Trust & Clearing Corporation (DTCC) today released a two-year industry roadmap for shortening the settlement cyclefor U.S. equities to one business day after the trade is executed (T+1). In its latest paper, “Advancing Together: Leading the Industry to Accelerated Settlement,” DTCC highlights the immediate benefits of moving to a T+1 settlement cycle, including cost savings, reduced market risk and lower margin requirements as well as the firm’s plans for galvanizing the necessary support for the project across a wide range of market participants.
The Move to T+1
In order to move to T+1, industry participants must align and agree to shorten the settlement cycle by implementing the necessary operational and business changes, and regulators must be engaged. DTCC says it does not have the regulatory or legal authority to unilaterally change the settlement cycle, but despite this, the organization said it continues to take a leadership position to shorten the settlement cycle to T+1, similar to the role it played in 2017 to move to T+2.
- Scott Porter