DTCC claim ‘smooth transition’ to T+1 31 May 2024US Reporter: Jack McRae
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DTCC say they have experienced a ‘smooth transition’ to the shorter T+1 settlement cycle.
Brian Steele, Managing Director and President for Clearing and Securities Services at the financial market infrastructure company, says the transition has been successful.
Steele commented: “After working closely with the industry for over three years, we are pleased these efforts are driving a smooth transition, including very high same day affirmation rates, which increased to 94.55 per cent yesterday.
“While we are proud of this progress, we will continue to collaborate with SIFMA, ICI and the industry to ensure a successful T+1 implementation in the coming days and weeks.”
DTCC says that 94.55 per cent of transactions on 29 May were affirmed by the Depository Trust Company’s cutoff time. This marked an increase in the affirmation rate from 73 per cent in January.
Prime broker affirmation rate stood at 98.6 per cent, investment manager auto affirmation (central match) rate was at 97.5 per cent, and custodian or investment manager (self) affirmation rate grew to 84.29 per cent.
DTCC also highlighted a decrease in fail rates. On the first day of trading on T+1, CNS fail rate was 1.9 per cent — down from 2.01 per cent average for May. The DTC non-CNS fails rate also was lower than the 3.24 per cent May average, standing at 2.92 per cent.
The movement to T+1 has also decreased the NSCC clearing fund from US$12.2 billion from the past month average to US$9.1 billion.
Tim Cuddihy, managing director and group chief risk officer at DTCC, explains: “One of the key industry benefits of T+1 is the significant decrease in clearing fund requirements, which have decreased by around US$4 billion — a significant reduction that is enhancing liquidity, increasing efficiency and mitigating risk for market participants.”
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