For this FTF News live interview, Eugene Grygo spoke with Carol Penhale, managing director of advisory and consulting at Broadridge Financial Solutions, about the industry moving to the shorter, T+1 settlement cycle for equities markets in the United States.
The issue is on peoples’ minds again as the Depository Trust and Clearing Corp. (DTCC) recently began pushing a two-year industry roadmap for a one-day settlement cycle, after execution, for equities trading in the United States. This effort is known as T+1 and follows the industry’s move to T+2 in 2017.
Before diving into the questions, Penhale talked about how she has been pushing for shorter settlement cycles since 1999 when straight through processing (STP) and shorter trading day settlement issues were top of mind for the industry.
These issues have evolved over the past two decades and the time may just be right for an industry move to T+1, Penhale notes in the interview.
Some of the major issues covered were:
- How T+1 will help with the vetting and managing of data to avoid the problems causing failed trades;
- How the challenges of the COVID-19 pandemic pushed the industry to seriously consider moving to T+1;
- The ongoing woes caused by batch processing;
- Future roles for DLT/ Blockchain technologies;
- Problems that might delay the T+1 move;
- And the major operational benefits of T+1.