T+2 – Shortened Settlement Cycle: Notice of the SEC moving forward

Overview

One year ago, Deloitte began the journey with the industry and our clients to prepare for shortening of the trade settlement cycle to trade date plus two days (T+2). This work began with the creation of the T+2 Industry Playbook as a guide for financial firms to follow as they prepared for implementing T+2. Deloitte is working closely with SIFMA, ICI and DTCC in the T+2 Command Center function and continues to advance the messages of the shortened settlement cycle by facilitating T+2 workshops for our clients and the industry.

Notice of SEC moving forward

On September 21, 2016, the Securities and Exchange Commission (SEC) gave notice that it will hold an open meeting on September 28, 2016 regarding the move to a shortened settlement cycle (T+2).1

With the SEC’s meeting notice, the US financial markets have taken another step in implementing T+2 as a regulatory change. Prior to this, T+2 had been an industry-led initiative with regulatory backing. With this notice and proposed regulatory rule changes, the market will have a regulatory mandate that they need to follow.

Deloitte has been a leader on the T+2 initiative

Deloitte has been and will continue to be out in front of this important industry initiative, working with the industry by facilitating workshops on this topic and assisting market participants in understanding the true scope and depth that this industry shift will entail. Deloitte views this change as affecting a large, but shallow, pool of requirements including:

  • Trade Settlement
  • Documentation
  • Asset Servicing
  • Regulatory Implications
  • Client and Operational Impacts

T+2 Industry Testing

With approximately one year until the scheduled T+2 implementation date (September 5, 2017) the next milestone that clients will be facing is preparation and execution of the industry test with DTCC in Q1 2017. Our Point of view (POV) on this phase of the T+2 implementation is that firms need to be ready for this milestone; ready operationally and technically.

We are committed to assisting our clients and the market with this pending regulatory change.


1 Sunshine Act Meeting, Securities and Exchange Commission, (September 21, 2016), available at https://www.sec.gov/news/openmeetings/2016/ssamtg092816.htm.

 

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