SIFMA, DTCC and ICI Shorten Securities Settlement Cycle in US – Corporate / Commercial Law

United States: SIFMA, DTCC and ICI Shorten U.S. Securities Settlement Cycle

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SIFMA, DTCC and the Investment Company Institute (“ICI”) have presented their plans to shorten the settlement cycle for securities issued in the United States. In a joint report titled “Accelerating the Securities Settlement Cycle in the United States to T + 1,” the organizations identified the end of the second quarter in 2024 as the target date for completion.

The report provides guidelines for companies to adapt to the shortened settlement cycle, which is accelerating from T + 2 to T + 1 settlement. The report includes considerations and recommendations for companies to assess and subsequently implement the changes needed for the transition.

The proposed transition is part of an ongoing effort to mitigate overall risk and reduce volatility in the clearing and settlement system. SIFMA, DTCC and ICI are officially discussing efforts to shorten the cycle since the release of a DTCC white paper in February 2021 (see related coverage). This report outlined the benefits that such a transition would bring, such as (i) optimization of settlement, (ii) reduced liquidity requirements and upfront costs, which would lower the risk of settlement failure, and (iii) the potential to eventually move to same day settlement (“T + 0”). Additionally, the report highlighted potential challenges the transition could bring, such as increased risk to investors, due to limited time to resolve unforeseen operational issues that may arise in primary or secondary market offerings. . DTCC is working with prominent members of the industry on the next steps.


Most years, post-market operational considerations are an afterthought, but 2021 was not a typical year. Meme’s stock volatility pushed market logistics into the headlines, as everyone from Robinhood CEO Vlad Tenev to SEC Chairman Gary Gensler discussed the potential shortening of the T + 2 period. (adopted in 2017). Reducing the payment cycle by 50% would present significant operational and regulatory hurdles, but could lead to regulatory updates needed to adopt the technology, for example by allowing ‘access equals delivery’ for trade documentation, rather than paper delivery continuing to be the default.

Primary sources

  1. SIFMA, ICI and DTCC Report: Accelerating the Securities Settlement Cycle in the United States to T + 1

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