By Jeff Fecteau
In March, the Securities and Exchange Commission (SEC) announced an amendment to shorten the standard settlement cycle for most broker-dealer securities transactions by one business day to T+2. According to the SEC, the change will enhance efficiency and reduce risk in the settlement process, which will ultimately benefit investors and market participants alike.
While a change of one business day may not seem too challenging, asset managers must be prepared well in advance of the transition.
In its recent “T+2 Settlement is Finally Here” article, Accenture Consulting outlines the steps you must take to be ready for the transition. The article explains how your trade verification process (allocation, confirmation, and affirmation) and the delivery of settlement notifications must look on trade date.
The report highlights three areas to review for readiness:
- Key performance indicators (e.g. same-day affirmation rates by broker)
- Process and procedures
Accenture concludes that organizations that effectively leverage technology and have consolidated trading processes are well positioned for the transition. Those that have legacy technology and disparate processes will likely face greater challenges.
SS&C can help you with the upcoming T+2 settlement requirement. We provide a broad set of middle- to back-office technology and services that allow investment managers to automate the day-to-day activity in investment portfolios.
Our knowledgeable and experienced team of middle-office professionals expertly manages your post-execution activities so you can concentrate on investment decisions. Our middle-office solution, GoTrade+, supports a wide range of functions including trade lifecycle management, matching and confirmation, settlement administration, wire processing, bank loan processing, and valuation.