DTCC’s T+1 IWG begins testing cycle
14 August 2023 US
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DTCC’s T+1 Industry Working Group (IWG) has begun its first T+1 testing cycle.
Test Cycle 1 consists of free-form testing and corporate actions scenario testing, and will continue until 25 August 2023. The second test cycle will take place between 28 August and 8 September.
A total of 21 test cycles are scheduled in the lead up to the T+1 implementation date. The testing environment will continue to be available for three days after 28 May 2024, with minimal testing support during the conversion week.
David Kirby, securities practice head at DTCC Consulting Services, comments: “Testing is a key part of any T+1 readiness programme, regardless of where firms sit in the securities lifecycle. Firms with well-developed testing programmes for accelerated settlement are well on their way to a successful implementation.”
Val Wotton, managing director and general manager for institutional trade processing at DTCC, adds: "Due to the number and magnitude of changes that will be required to achieve a T+1 settlement cycle, it is critical that firms conduct a comprehensive and well-coordinated industry test to ensure readiness and a successful implementation. This includes end-to-end testing from trade execution to trade settlement, involving Institutional Trade Processing (ITP), National Securities Clearing Corporation (NSCC) and Depository Trust Company (DTC) as well as other relevant market infrastructures.
"At DTCC, helping to ensure a seamless transition for our members and the wider industry remains a top priority, and we urge firms to take full advantage of our robust testing opportunities. For those firms who may still leverage manual post-trade processes, it is critical that they maximise automation to achieve timely settlement."
Jesus Benito, head of domestic custody and trade depository at SIX, says: “The US markets started assessing the movement from T+2 to T+1 two years ago — but now the talking ends and the testing begins.
“Clearly, this transition is not the same as when we moved from T+3 to T+2 as now the time pressure is much greater. However, the upcoming test cycles will be a good indicator of how prepared the industry is ahead of next year. Either way, the industry has plenty of solutions available to get there — and this is the perfect time to begin stress testing.”
Test Cycle 1 consists of free-form testing and corporate actions scenario testing, and will continue until 25 August 2023. The second test cycle will take place between 28 August and 8 September.
A total of 21 test cycles are scheduled in the lead up to the T+1 implementation date. The testing environment will continue to be available for three days after 28 May 2024, with minimal testing support during the conversion week.
David Kirby, securities practice head at DTCC Consulting Services, comments: “Testing is a key part of any T+1 readiness programme, regardless of where firms sit in the securities lifecycle. Firms with well-developed testing programmes for accelerated settlement are well on their way to a successful implementation.”
Val Wotton, managing director and general manager for institutional trade processing at DTCC, adds: "Due to the number and magnitude of changes that will be required to achieve a T+1 settlement cycle, it is critical that firms conduct a comprehensive and well-coordinated industry test to ensure readiness and a successful implementation. This includes end-to-end testing from trade execution to trade settlement, involving Institutional Trade Processing (ITP), National Securities Clearing Corporation (NSCC) and Depository Trust Company (DTC) as well as other relevant market infrastructures.
"At DTCC, helping to ensure a seamless transition for our members and the wider industry remains a top priority, and we urge firms to take full advantage of our robust testing opportunities. For those firms who may still leverage manual post-trade processes, it is critical that they maximise automation to achieve timely settlement."
Jesus Benito, head of domestic custody and trade depository at SIX, says: “The US markets started assessing the movement from T+2 to T+1 two years ago — but now the talking ends and the testing begins.
“Clearly, this transition is not the same as when we moved from T+3 to T+2 as now the time pressure is much greater. However, the upcoming test cycles will be a good indicator of how prepared the industry is ahead of next year. Either way, the industry has plenty of solutions available to get there — and this is the perfect time to begin stress testing.”
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