Today, the SEC has confirmed the go-live date of the shortening of the settlement cycle (T+2 to T+1) for the US market to be 28th May 2024, the weekend of Memorial Day. This is an effective acceleration of when the financial market was expecting the implementation date to be; 3rd September 2024.
Market Participants trading US cash equities, munis and corporate bonds should take this into account for their planning and readiness to move to T+1 imminently. The changes to the processes, controls, and organisation required over the next 15 months could be significant.
Some of the key elements to consider:
- Has your T+1 impact assessment been completed? Which areas require the biggest changes and what types of changes are required?
- Are you funded on your technology transformation e.g. trading, confirmation, settlement systems?
- Have you considered and agreed on the impact of your global operating models, e.g., FX, inventory management, location of processing team to meet the regulatory changes of the settlement date in US?
- Have you planned your T+1 testing program, and are you getting ready for a potential acceleration of US market T+1 testing timeline e.g., DTC / NSCC?
We would also recommend the monitoring of other jurisdictions like Canada, which may desire to align their timeline to the US market.
At Quorsus, we have experience in advising our clients on their journey to compliance with T+1. Our consultants are leveraging our deep industry knowledge to ensure we’re best placed to support our clients in overcoming the challenges they face as the industry gets ready to move to T+1.