The industries uphill climb to T+1 settlement
“Innovation distinguishes between a leader and a follower." ~ Steve Jobs
When The U.S. Securities and Exchange Commission recently adopted rule changes to accelerate the settlement cycle to T+1 as soon as May 28, 2024, at Templum, we said, "It's about time."
Templum, since its inception, has operated on a T+1 basis, recognizing the settlement and operational risk reduction, capital efficiency gains, and improved investor experience that come with a shortened settlement cycle.
Templum's technology was developed to support T+1 or even same-day settlement. Systems, controls, and processes are all enterprise-grade and automated across the entire trade lifecycle.
Why is a T+1 challenging for the broader capital market?
A shift to a shorter settlement cycle requires changes to the technology infrastructure for trading operations of brokers. According to a recent white paper from Torstone Technology, 81% of brokers and banks active within the U.S. and Canadian markets use manual processes or home-grown systems to support their post-trade operations1. However, despite this heavy lift, the move to T+1 pushes firms to invest in modern technologies.
What needs to happen across the industry
The settlement cycle changes will inevitably impact the currently and open a golden opportunity for businesses to revisit and enhance their post-trade processing capabilities. Specifically, brokers must analyze their data, systems, operating workflows, and business models to support a T+1 settlement cycle. Using modern technologies like Templum can not only update brokers’ post-trade operations from a technology perspective, but also help brokers prepare for a new era of faster, more automated post-trade processing.
If you are interested in drawing on our expertise and scaling your business, please contact us for a consultation and/or demonstration.
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