Preparing for Shortened Settlement Cycles Beyond T+2

Steven Halliwell (), Michael Martinen () and Julia Simmons ()
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Steven Halliwell: Capco, Postal: 77 Water St, 10th Floor, New York, NY 10005, http://www.capco.com
Michael Martinen: Capco, Postal: 77 Water St, 10th Floor, New York, NY 10005, http://www.capco.com
Julia Simmons: Capco, Postal: 77 Water St, 10th Floor, New York, NY 10005, http://www.capco.com

Journal of Financial Transformation, 2016, vol. 44, 13-16

Abstract: In 2017, the U.S. and Canada will be breaking their 20-year T+3 settlement cycle in what will be the greatest reform since 1995’s migration from T+5 to T+3. The move to T+2 settlement is intended to harmonize with global markets already on a T+2 settlement cycle, reduce risk and exposure, enhance market liquidity, and increase efficiencies. Both countries will be moving approximately 100 products in scope across equities, corporate & municipal bonds, and unit investment trusts (UIT) to a T+2 settlement in the third quarter of 2017. These products combined account for approximately U.S.$950 billion in daily clearing. To prepare for T+2, the Depository Trust & Clearing Corporation (DTCC) is planning to conduct industry testing in Q1-2017 ahead of the proposed go-live date of September 5, 2017.

Keywords: Institutions: Design; Formation; Operations; and Impact; Cost; Capital; Capital; Total Factor; and Multifactor Productivity; Capacity; Expectations; Speculations; Banks; Depository Institutions; Micro Finance Institutions; Mortgages; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices (search for similar items in EconPapers)
JEL-codes: D02 D24 D84 G21 L16 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jofitr:1582

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