T+1 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, 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. On February 15, 2024, in an open meeting, the SEC voted to adopt the proposed rule to accelerate the settlement cycle to one day, i.e., T+1. As a result, the United States will transition to T+1 on May 28, 2024.9 Canada will transition to T+1 on May 27, 2024.

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 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.

Transition Dates

United States: Tuesday, May 28, 2024
Canada: Monday, May 27, 2024

Questions?

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