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      T+2 Settlement is focused on reducing the trade settlement from T+3 days to T+2 days. DTCC, SIFMA, ICI, and the industry participants decided in 2014 to collaborate, identify, and assess the industry level requirements, rule changes, and proposed plan for a move to T+2 settlement. After significant industry feedback, the group has developed an implementation plan and impact analysis to drive the T+2 migration and testing plan.

       
      DTCC and the Industry Working Group (IWG) have published the following T+2 requirements:

      • The roadmap plans to complete a move from a T+3 settlement cycle to a T+2 cycle for various U.S. Domestic securities by September 2017 for the following markets:

      • U.S. Equities

      • Corporate bonds

      • Municipal bonds

      • Unit Investment Trusts

      • T+2 will involve trade processing and asset servicing, including settlements/buy-ins, securities lending, and other components.

      • The move to T+2 will require the SEC and FINRA to approve a number of changes to their rules.

      • Review and analysis of all applicable processes.

      • Examination of all trading, settlement and downstream systems and processes.

      • Ascertain that processes and systems will be able to scale for reduced time frames caused by the shortening of the settlement cycle.

      The anticipated benefits of migrating from “T+3” to a “T+2” settlement are the following:

      • Reduction in credit and counterparty risk, operational process improvements, cash deployment, increased market liquidity, and lower collateral requirements.

      • Reduction in margin and liquidity demand.

      • Increase in global settlement harmonization.

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      Financial Services Steps

      Commence industry SSC discussions; lead and conduct industry-wide SSC analysis.

      • Establish industry consensus and support; develop industry approach including establishing ISC, IWG, and SWGs.

       
      • Define industry requirements and initial timeline for industry efforts; conduct industry readiness survey.

       
      • Publish requirements and initial timeline; develop industry communication plan.

       
      • Engage regulators and industry infrastructure providers to affect rule change; publish “Shortening the Settlement Cycle: The Move to T+2” industry paper and conduct Information sessions (e.g. webinars, industry events).

       
      • Initiate planning, monitor, track and support migration efforts.

       
      • Develop industry implementation plan and test plans.

       
      • Obtain regulatory support and priority; recommend rule changes to regulators.

      • Publish final rules and implementation date; recommend T+2 implementation date.

       
      • Conduct internal impact assessment; develop implementation plan and approach.

       
      • Develop target operating model including processes & procedures; identify organization-level business / technical requirements.

       
      • Build and test technology components; conduct training.

       
      • Initiate testing with industry infrastructure (CSDs, Exchanges, Utilities, Custodians, etc.)

       
      • Perform industry-wide testing.

       
      • Review and monitor progress.

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