DTCC, SIFMA, ICI Move Closer to T+1 Settlement

The Depository Trust & Clearing Corporation (DTCC), Securities Industry and Financial Markets Association (SIFMA) and the Investment Company Institute (ICI) have published a “playbook” on T+1 settlement.

The T+1 Securities Settlement Industry Implementation Playbook outlines the approach to identifying the implementation activities, timelines, dependencies, and risks that should be considered to prepare for the transition from the current trade date plus 2 days (T+2) settlement cycle to a trade date of T+1 settlement cycle.

Deloitte & Touche LLP was engaged by SIFMA and ICI to assist in the drafting of this Playbook.

Kenneth E. Bentsen, Jr., SIFMA president and CEO, said as part of the goal of decreasing risk, the three group started discussions in 2020 and formally initiated the project to pursue T+1 in early 2021.

“This February, we welcomed the SEC’s leadership in supporting the acceleration of the settlement cycle to T+1 via its proposal, which provides regulatory certainty to market participants. Today we are pleased to offer all impacted market participants a guide to follow as they develop their implementation plans for moving to T+1 settlement in 2024.”

The group noted that because the Securities and Exchange Commission (SEC) proposal to shorten the settlement cycle is not yet final, the Playbook serves as a guide to assist with the many complex steps involved in the move to T+1. The Playbook assumes a third quarter 2024 transition date to a T+1 settlement cycle.

“ICI is pleased to coordinate with DTCC, SIFMA, and the SEC on the industry-wide effort to shorten the settlement cycle to T+1,” said Eric J. Pan, president and CEO of ICI, adding that T+1 will reduce settlement risk for market participants.

“Moving to T+1 settlement is a transformational change for the securities industry,” said Bob Walley, principal, Deloitte & Touche LLP, adding that the Playbook provides industry participants the information to help them understand the impacts of T+1 on their organization and to prepare for this historic transition.

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