美国.S. Securities and Exchange Commission (SEC) recently proposed rule changes to accelerate the settlement cycle to T+1. If the rule changes are adopted, a T+1 cycle for U.S. equities transactions could be implemented in 2024. To help firms plan and prepare for the move to a T+1 结算 Cycle, 存 has launched a series of virtual forums to help clients and the industry understand some of the potential impacts of the transition to a T+1 结算 Cycle on specific 存 processes.
Related: Discover More from the Accelerating to T+1 Series
这是本系列的第三篇文章, 五月三日举行, focused on the challenges of a shortened settlement cycle on the allocation of institutional trades.
在第一个面板中, 马特Stauffer, 存董事总经理, Head of 机构贸易处理; Sean McEntee, 存执行董事, 机构贸易处理, 鲍勃·斯图尔特, 存执行董事, 机构贸易处理 also discussed the SEC’s focus on institutional trade processing and trade flow regarding shortening the settlement cycle.
拟议的新规则和义务:
- Broker/Dealers: proposed rules put a contractual obligation on broker/dealers to achieve same-day affirmation process with counterparties.
- Investment Managers: proposed rules shift the recordkeeping obligation by requiring the broader buy-side community to keep records of allocations, affirmations and 确认s and to document all steps in the process.
- Central Matching Service Providers: must establish and enforce procedures to facilitate straight-through-processing (STP).
当天肯定
根据专家组的说法, there is a high correlation between affirming trades and eliminating friction.
Stauffer noted that with a move to T+1 settlement, 帖子-trade agreement and affirmation needs to happen faster. This is achieved through increased efficiency in the allocation, 确认, 以及肯定过程.
With 存 中医’s Match to Instruct (M2i) workflow, trades can be auto-affirmed on trade date and delivered directly to 直接转矩 for settlement upon trade match. McEntee touched on the data showing that clients using the M2i workflow today to match, 同意并解决他们的美国问题.S. institutional trading achieve a near 100% affirmation rate by 9 PM on trade date.
驱动结算的终结
The authoritative trade record is built in 中医. Trades are enriched automatically with SSIs via 警报, with matching on Place of 结算 through 警报 Key Auto Select (AKAS).
Stewart explained how our services then facilitate the instruction of that authoritative trade record to the global custodian who pass it to their local custodian or corresponding depository for settlement. 如果有问题或例外, ITP capabilities enable clients to view and manage those statuses to remediate prior to settlement date. 一旦确认结算, clients can see immediately their trade has reached settlement finality.
准备T+1
The second panel moderated by David Kirby, 存执行董事, Head of Americas Relationship Management, the panel of speakers included: Carolyn Kostelny, 存董事总经理, 咨询服务; Steve Chittenden, 卢米斯, Sayles & 公司副总裁, Head of Investment Operations; Mike Fiscella, 摩根士丹利董事总经理, 共享服务 & Banking Operations (SSBO); and David Kabilian, State Street Corporation Managing Director, 全球托管结算和收益 & 证券借贷.
Below are highlights from of some of the panel’s discussion:
T+1结算的主要好处
- Better straight-through-processing (STP)
- 更快的解决
- 所需保证金减少
- Reduction of operational and systemic risk
- Decrease in costs and resources from reduced number of unsettled positions
为影响做准备
- The move to T+1 further compresses the settlement cycle by 50%, presenting unique challenges; firms operating in a legacy environment and industry standards must act now.
- Firms should begin to analyze which processes are manual or have multiple touchpoints and what tech stack changes need to be made to enable an automated end-to-end process.
- Not all jurisdictions are moving to T+1, and global trades will add to the complexity of issues due to a lack of harmonization — making it even more critical for trades to be confirmed and matched on trade date.
成功定位
- Smaller firms need to take a data-driven approach to align with SEC changes, while larger firms have extra work to understand the readiness of clients.
- 存 机构贸易处理 (ITP) solutions provide a unique value proposition to fully automate 帖子-trade processing and achieve Same Day Affirmation (SDA), 是T+1结算的关键推动者.
- 存 can help firms analyze their own operational performance and the performance of peers & counterparties to facilitate more targeted client conversations and necessary follow-up action.