In February, the SEC finalized a rule to shorten the settlement cycle from T+2 (i.e., two days after a trade is executed) to T+1, with a compliant date of May 28, 2024. Additionally, Canadian regulators also finalized the adoption of T+1 on May 27, 2024, and other global regulators appear to be joining this effort to align with the U.S. markets to remain competitive. The T+1 initiative has provided an opportunity to revisit the equity trade processing workflow, revealing complex trade data flow among parties, systems, and entities.

The report examines the impact of T+1 across business functions in the roadmap to comply with the T+1 mandate and identifies other post-trade areas that could be addressed to remove inefficiencies in the clearing and settlement process. It is based on a virtual discussion with 12 members of Datos Insights’ Investment Operations Council and 15 discussions held between January 2023 and June 2023 with industry participants involved in T+1 settlement initiatives.

Clients of Datos Insights’ Capital Markets service can download this report.

This report mentions the DTCC and Swift.