The race to T+1 settlement

The future of financial transactions is changing rapidly, with the industry gearing up for major transformation through the adoption of T+1 settlement. The move, in the United States, from the current T+2 cycle to T+1 settlement – set for May 28, 2024 – will affect financial services organisations globally and impact a wide array of financial products.

Nor is the transition limited to the US alone – Canada plans to adopt T+1 processing in 2024, and India’s stock exchanges have already initiated a phased transition to T+1 settlement. Jurisdictions in Europe and Asia are also contemplating the benefits of accelerated trade settlement. We may eventually even see a global move to a T+0 cycle.

The introduction of a T+1 cycle should see a reduction in settlement delays, as well as result in the use of faster and more efficient settlement processes. This offers multiple advantages to the industry, including: increased financial stability; reduced credit, market, and liquidity risks; optimised capital utilisation; and, finally, greater liquidity – bringing new opportunities for traders and investors.

There is no doubt, however, that the move to T+1 settlement will have a significant impact on financial institutions’ existing technology landscapes and operational workflows. Creating the optimal path to T+1 readiness poses a daunting prospect for many firms – especially given the speed with which organisations must now act.

With many years of deep industry experience, SmartStream – which has been at the forefront of innovation for four decades and has an impressive track record of deploying post trade processing solutions across the world’s largest financial institutions – is well positioned to help firms meet the challenges of T+1 settlement. Our extensive industry knowledge, coupled with highly effective, proven solutions, enables us to partner with organisations of all sizes, assisting them to not only answer the demands of T+1 settlement but to take full advantage of the opportunities it creates.

Given that the shift to T+1 settlement is now squarely on the horizon, it is more essential than ever to stay informed and prepare for what lies ahead. In response, we have created an exclusive whitepaper, ‘The race to T+1 settlement’, which provides in depth insights into the move to accelerated settlement and its impact on the financial sector.

To find out more, simply complete the form to access our whitepaper.

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