Transitioning to T+1: Entering a New Phase for Trade Settlement

Effective from May 28, 2024, the settlement timeline on US equities, bonds, mutual funds, ETFs, and associated instrument trades, will change from two business days to one.

This transition will certainly bring its fair share of challenges and drawbacks, but the accelerated settlement will also bring several benefits for the financial markets, such as improved efficiency in investment and trading processes, higher liquidity, and reduced risk.

How, specifically, will this impact organizations across the financial services industry, and what should your firm be doing now to ensure its technology and operating models are ready to deliver?

With less time between trading and the settlement cycle to perform post-trade processing, eliminating manual processes and maximizing automation across pre-settlement processes is key.

This whitepaper will help your firm assess readiness across teams and technology by discussing:

• The new rule and upcoming changes
• What investment firms and other buy-side participants can do to prepare
• Implications of changes to middle- and back-office, and treasury functions
• Optimization of internal operations and how technology can help
• Considerations of outsourcing to financial operations managed services

T+1 settlement represents a significant shift in the financial industry, and investment firms need to be prepared for this accelerated settlement cycle. By understanding the advantages, challenges, and considerations outlined, investment firms can proactively adapt their operations and infrastructure to ensure a smooth transition to T+1.