In May 2024, all U.S. trades will need to settle on T+1, or one day after they have traded. The move from the current T+2 cycle will aim to reduce settlement risk, and reduce liquidity, margin and collateral requirements. Other countries across the world are assessing similar moves.
In addition to enhancing custody and settlements, the move will have a ripple effect on many processes across the securities trade lifecycle which will impact all global asset managers and financial institutions. It will also create an opportunity to automate and enhance previously manual or inefficient processes to meet the heightened demands and constrained timelines inherent in the move to shorter settlement cycles.
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