The U.S. Securities and Exchange Commission (SEC) confirmed that the T+1 trade settlement cycle will begin in May 2024. This change was first proposed in February 2022. It shortens the current T+2 settlement period by one day. The shift will significantly affect the U.S. securities market and global financial systems.
This whitepaper outlines the operational and strategic impacts. The change affects every part of the trade lifecycle. This includes pre-trade preparation, execution, and post-trade processing. Firms must act quickly to meet tighter timelines. Delays could lead to settlement failures, regulatory issues, and reputational damage.
There is a need for a structured approach. Firms should begin with a readiness assessment. They must identify capability gaps and build a roadmap for change. Automation, data quality, and collaboration are key to success. Engaging early with custodians, brokers, and vendors is also critical.
The whitepaper warns against underestimating the complexity of the transition. It highlights the need for strong governance and cross-functional coordination. The shift is not just a compliance task. It is a chance to modernize systems and reduce risk.
T+1 offers long-term benefits. These include improved efficiency and lower counterparty risk. But success depends on early planning and clear execution. Firms that prepare well can turn this challenge into a strategic advantage.
Download the full whitepaper using the form below. To discuss how Davies can support your T+1 transition, contact us.