About a-team Marketing Services
The knowledge platform for the financial technology industry

A-Team Insight Blogs

US Reduces Settlement Timeframe from T+3 to T+2 Effective Immediately

Subscribe to our newsletter

The US T+2 Industry Steering Committee has achieved its objective of reducing settlement time to trade data plus two days (T+2) for securities including US equity, corporate and municipal bonds, and unit investment trust trades. The settlement cycle was last changed in 1995 from T+5 to T+3 and brings the US in line with the EU, which moved to T+2 settlement in January 2015.

The steering committee was set up by DTCC in 2014 and is co-chaired by the Investment Company Institute (ICI) and the Securities Industry and Financial Markets Association (Sifma). The reduction in settlement time is expected to reduce market and counterparty risk, increase financial stability and improve safety and efficiency for investors and market participants. The alignment of the US settlement timeframe with other major markets that use T+2 settlement also provides a step towards global settlement harmonisation.

The SEC finalised rule changes to facilitate the shorter settlement cycle in March 2017, and nine other regulators and self-regulatory organisations have also taken action. DTCC estimates the lower levels of risk associated with a shorter settlement cycle will reduce the average daily capital requirements for clearing trades through its DTCC National Securities Clearing Corporation by approximately 25%, or $1.36 billion.

Murray Pozmanter, head of clearing agency services and global operations and client services at DTCC, comments: “The US move to a T+2 settlement cycle marks the most significant change to the market’s settlement cycle in over 20 years. A collaborative industry-driven effort with strong support from regulators, the T+2 initiative has achieved its common goal.”

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Adopting Entity Data Hierarchies to Address Holistic Risk Management

Firms across the board are struggling to gain a comprehensive view of their counterparty risk. In the wake of the Credit Crisis, regulators have increased their focus on pushing firms to not only better understand risk exposure, but also be able to provide evidence of the analysis they use to create their view of risk....

BLOG

RepRisk Roundtable London: Tackling Hidden Sustainability Risk in Private Markets with AI

Sustainability risk is moving into the core of capital markets decision-making, closely tied to conduct risk, counterparty exposure and reputational impact. For senior leaders across risk, investment, compliance, sustainability, and supply chain functions, the question how to interpret complex signals from vast quantities of data and apply them with confidence in credit, investment, and operational...

EVENT

Data Management Summit New York City

Now in its 15th year the Data Management Summit NYC brings together the North American data management community to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

Enterprise Data Management Europe 2010

he US may seem to be ahead of the rest of the world in terms of championing the data management cause with the inclusion of reference data focused items in the Dodd-Frank Act, but Europe is not too far behind. Senior European level officials such as European Central Bank (ECB) president Jean-Claude Trichet have taken...