Industry Engages with Deloitte to Move T+2 Initiative to the Next Critical Deliverable

The Industry Steering Committee (ISC) recently began a 10-week engagement with Deloitte & Touche LLP (Deloitte) to help drive the US two-day settlement cycle (T+2) initiative to the next critical stage: presenting a detailed implementation schedule, including milestones and dependencies, to the U.S. Securities and Exchange Commission.

“In September, we received the green light we were looking for -- a directive from the SEC Chair, Mary Jo White, to continue to completion this effort to shorten the U.S. settlement cycle,” said Marty Burns, ISC Co-Chair and Acting Chief Industry Operations Officer, Investment Company Institute (ICI). “The letter from SEC explicitly requested that we build on the high-level Migration Timeline contained in our White Paper and provide a timely update in December to SEC staff.”

The tentative timeframe developed by the ISC and the Industry Working Group (IWG), as outlined in the July White Paper, called for an implementation of T+2 in the U.S. in Q3 2017. That deadline would be contingent on meeting several milestones, however the industry participants in the ISC and the various working groups recognized that a delay at any point might push back the overall implementation.

Deloitte’s role is to assist in taking the T+2 effort to this next level of detail and develop the “playbook” that could be used by all firm types – buy-side and sell-side. This engagement has meant setting up twice-weekly calls with the steering committee, working groups and sub-working groups, preparing materials and documentation, and facilitating workshops.

“The industry’s work with Deloitte to develop playbook implementation plans and associated timelines is a critical next step to achieving a T+2 settlement cycle in third quarter of 2017,” said Tom Price, co-chair of the ISC and Managing Director of the Technology, Operations and Business Continuity Group, SIFMA. “We look forward to making these plans available to regulators and the broader industry to keep this process moving forward to ensure that all market participants have the tools and knowledge to prepare their individual firms to be T+2 ready.”

“The T+2 White Paper gave us all a common language and an excellent foundation to start the conversation,” said Bob Walley, Engagement Partner, Deloitte & Touche LLP. “Now, we are going even deeper and broader, highlighting other areas that will potentially need to be addressed. We are intent on capturing the voice of the industry, while at the same time, focusing everyone on how to move this initiative forward in an actionable way.”

At the halfway point in the engagement in mid-November, Deloitte presented an update to SIFMA, ICI and FINRA, as well as to the executive committee of the SEC, to ensure that everyone was satisfied with the direction of the plan, and the level of detail. Deloitte anticipates delivering the draft playbooks to the ISC by December 11, 2015; the ISC will, in turn, deliver the implementation plan to the SEC by December 18, 2015.

Finalized documents will be disseminated to the industry and published on the web site.

“I encourage industry participants to read the White Paper and in December, the implementation plan document,” said Burns. “Everyone should be prepared: 2016 is going to be a year for education, development and readiness-testing for firms.”