Moving to T+2 fosters greater
        certainty, safety, and soundness
                in the U.S. capital markets

Currently in the U.S., the securities industry completes settlement for equities, corporate and municipal bonds, and unit investment trusts (UITs) on the third day after a trade is executed by sending payment for the trade to the seller and the securities to the buyer. This settlement cycle is known as “trade date plus three days” or T+3.

Shortening the settlement cycle to T+2 will help mitigate operational and systemic risk by reducing exposure between the parties to a trade, between the counterparties to the clearinghouse, and for the clearinghouse itself.

The compression of timeframes and required changes to the rules, procedures, and internal processes of industry participants are core enablers of a move to T+2. Other enablers include migration to institutional trade-date matching as a best practice, further dematerialization of physical securities, mandated settlement matching, and a cross-industry standing settlement instruction (SSI) solution are in place or in the process of being implemented.

The last time the U.S. settlement cycle was shortened was in 1995, when it changed from T+5 to T+3. Many countries already operate under a shortened settlement cycle, or are moving to it. Most European Union member states have harmonized their settlement cycles to T+2 in 2014. Other major markets in the Asia/Pacific region are already on T+2 or T+1. Singapore and Australia are actively looking to reduce their settlement cycle from T+3.