About a-team Marketing Services
The knowledge platform for the financial technology industry
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: S&P Recorded Webinar: Confidence and Clarity – Understanding Valuation Risk

This recorded webinar will help you to understand how valuations and pricing have evolved over the last couple of years in the post-crisis environment. In this session, you will hear different perspectives on how market participants have been tackling the valuation risk challenge from Paul Sharkey of Northern Trust, James Dimech Debono of KPMG, and...

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

Eagle Alpha Alternative Data Conference, Fall, New York, hosted by A-Team Group

Now in its 8th year, the Eagle Alpha Alternative Data Conference managed by A-Team Group, is the premier content forum and networking event for investment firms and hedge funds.

GUIDE

Evaluated Pricing

Valuations and pricing teams are facing a much higher degree of scrutiny from both the regulatory community and the investor community in the glare of the post-crisis data transparency spotlight. Fair value price transparency requirements and the gradual move towards a more harmonised accounting standards environment is set within the context of the whole debate...