Industry Groups Cheer T+1 as a Success

The T+1 Settlement Cycle: A Welcome Change for the Securities Industry

The T+1 settlement cycle, which went into effect on June 28, 2022, has been met with widespread praise from industry groups. The new rule, which requires trades to settle one business day after they are executed, is seen as a major improvement over the previous T+2 settlement cycle, which allowed for two business days of settlement.

Benefits of the T+1 Settlement Cycle

The T+1 settlement cycle offers a number of benefits for the securities industry. These benefits include:

• Reduced risk: The T+1 settlement cycle reduces the risk of trades failing to settle, as there is less time for events to occur that could prevent settlement.
• Increased efficiency: The T+1 settlement cycle makes the settlement process more efficient, as it reduces the amount of time that it takes for trades to settle.
• Lower costs: The T+1 settlement cycle can lower costs for the securities industry, as it reduces the need for firms to hold large amounts of cash on hand to cover settlement.

Industry Groups Applaud the T+1 Settlement Cycle

Industry groups have been quick to praise the T+1 settlement cycle. The Securities Industry and Financial Markets Association (SIFMA) called the new rule a "significant step forward" for the securities industry.

The Investment Company Institute (ICI) said that the T+1 settlement cycle will "improve the safety and efficiency of the settlement process."

The American Bankers Association (ABA) said that the T+1 settlement cycle will "benefit all participants in the securities industry."

Conclusion

The T+1 settlement cycle is a welcome change for the securities industry. The new rule is expected to reduce risk, increase efficiency, and lower costs. Industry groups have been quick to praise the new rule, and it is expected to have a positive impact on the securities industry for years to come.