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DTCC feedback on Trade’s Affirmation progress, with T+1 implementation two months away

Because the implementation date for the US T+1 settlement is quick approaching, DTCC issued the next assertion:

The U.S. transition to a T+1 settlement cycle is 2 months away, and market contributors are persevering with preparations because the Could 28, 2024, implementation date approaches. Many companies proceed to give attention to enhancing operational efficiencies, together with the achievement of same-day affirmation.

DTCC evaluation reveals that in January 2024, 73% of transactions had been affirmed by the DTC cutoff time of 9:00PM ET on commerce date. In February, the quantity elevated to 74.5%. When contemplating particular market segments as of the tip of February 2024:

  • Prime Dealer Affirmation Price: 83% (up from 81% in January)
  • Funding Supervisor Auto Affirmation (central match) Price: 89% (down from 92% in January)
    • In February, DTCC’s ITP added 26 new Funding Managers to the CTM auto affirmation workflow, bringing the overall to 369. As Funding Managers on-board, and configure their Brokers, this affirmation fee will enhance. This fee is anticipated to normalize to 92%+ forward of T+1.
  • Custodian or Funding Supervisor (self) Affirmation Price: 53% (up from 51% in January)
    • Self-affirmation is supported by DTCC’s TradeSuite ID. Over 1,150 TradeSuite IDs have been added in Q1 2024 up to now, offering Funding Managers with larger transparency into affirmation charges, in addition to enabling them to maneuver to an Auto Affirmation (central) mannequin, as wanted, to realize considerably larger affirmation charges.

As per SEC Trade Act Rule 15c6-2, Dealer-dealers should take actions to make sure that 100% of all trades are affirmed as quickly as technologically practicable and no later than the tip of commerce date, and DTCC recommends organizations affirm over 90% of their transactions by 9:00PM ET on commerce date to take care of present market efficiencies. If companies are unable to make the 9:00PM ET DTC cutoff and the cutoff for affirmed prime brokerage exercise to settle through DTCC’s Steady Internet Settlement System (CNS), bilateral transactions may be settled by having the deliverer difficulty an evening supply order (NDO) by 11:30PM ET on commerce date or a day supply order (DDO) on T+1. NDOs and DDOs are extra pricey and operationally intensive than these affirmed by 9:00PM ET. Due to this, DTCC recommends that market contributors leverage automated affirmation workflows to seamlessly affirm trades by 9:00PM ET on commerce date, together with using TradeSuite ID.

With two months left till the T+1 implementation date, market contributors should ramp up their preparations and testing. On the identical time, we encourage continued collaboration between Funding Managers and their Custodians. By optimizing settlement workflows and embracing automation within the post-trade affirmation course of, market contributors shall be higher positioned to realize T+1.


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