The T+1 Playbook is Here – 6 Things You Need to Know

On August 1st, 2022,  the T+1 Securities Settlement Industry Implementation Playbook was published jointly by The Securities Industry and Financial Markets Association (SIFMA), the Investment Company Institute (ICI), and The Depository Trust & Clearing Corporation (DTCC). The playbook provides valuable information on the T+1 initiative, as well as a perspective of the scale of the effort.  It is well worth the time to review the information as you evaluate the impact of T+1 to your business.

Some key areas to consider:

  • The playbook is intended to serve as a guide to evaluate the impact to your business and includes key areas such as trade processing, custody, securities lending, prime brokerage and funding and liquidity considerations. It is not a substitute for the critical analysis of your firm’s technology and operations processes, and the impact of T+1 settlement.
  • Capital and operational efficiencies are intended to be key benefits of the initiatives. Like the move to T+2, this requires technology enhancements and further reduction in manual processes. Now is a good time to be opportunistic in making changes. This can be accomplished through thoughtful planning, technology investment and execution of process improvement plans. 
  • Converting to T+1 will require financial commitment and the allocation of key staff and technology resources.   This should be factored into the 2023 budgeting process. In many cases, it may make sense to leverage external resources and expertise.
  • Proactive management and communication with key partners and service providers is needed. T+1 settlement impacts more than your clearing broker or core technology platforms and includes all aspects of the trade life cycle. Your firm should evaluate all functions from onboarding to trade execution, through settlement with the custodian to lending and financing activities. Note that the Playbook provides additional guidance on key considerations.
  • A comprehensive plan tailored to your firm is essential. The Playbook provides implementation timelines and key milestones. The Appendix identifies key changes in timing and deadlines, dependencies, and activities to evaluate. This is high-level information that can be used as a tool to help guide your efforts but is not a substitute for a thorough analysis and planning effort for your firm’s business.   
  • If you have not initiated an analysis of your firm’s technology, processes, and resource availability, now is the time. The current projection for the conversion to T+1 is the third quarter of 2024. While that appears far down the road, it is closer than you think when you consider the effort required to assess the impact to your firm, complete a gap analysis, and develop and execute plans to improve technology and operational processes.

At Oyster, our experts are actively engaged with market participants. We have extensive knowledge of the major clearing firms’ products and services, trading platforms used by self-clearing firms, and other service providers. Oyster Consulting provides perspective and guidance on how to best align your processes and fully-utilize the services of your key partners in the T+1 implementation. Our former regulatory and industry experts will also help you identify opportunities to improve desk performance and profitability, share industry compliance and provide supervisory best practices.

Be on the lookout for more blogs as we discuss what needs to be done, how to leverage work that has been completed and why having an outside resource can add value to your T+1 implementation.

About The Author

Jeffrey Gearhart is an intuitive, analytical leader with over 30 years of experience in banking and capital markets businesses. Prior to joining Oyster, he held senior leadership roles with The Bank of New York Mellon, including business line COO, CFO, business development and relationship management.

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