Two-day Settlement Cycle by 2017 in Prospect for US

A newly-released white paper outlines an action plan to shorten the US settlement cycle for equities, corporate and municipal bonds, and unit investment trust (UIT) by the third quarter of 2017 and put the US in sync with the world’s other markets.

The white paper is issued by the T+2 Industry Steering Committee (T+2 ISC), organised by The Depository Trust & Clearing Corporation (DTCC) and made up of members from across the securities industry, including the Securities Industry and Financial Markets Association (SIFMA) and the Investment Company Institute (ICI). T+2 ISC was formed to provide oversight and guidance on the US move to a shorter settlement cycle.

The aim is to move the US from a three-day (T+3) settlement cycle to two-day (T+2) by the third quarter of 2017. T+2 ISC says that the resulting benefits will include reducing operational, systemic and counterparty risk, lowering liquidity needs, and limiting pro-cyclicality, while aligning the US with other T+2 settlement markets across the globe. A shorter settlement cycle will enhance US market structure, improving safety and efficiency for investors.

“The announcement of this proposed timeline by the T+2 ISC is a critical step forward in shortening the settlement cycle and harmonising the US with other major markets globally,” said Michael Bodson, president and chief executive (CEO) at DTCC.

“The move to a two-day settlement cycle will strengthen the financial system by reducing risk and creating greater operational efficiencies. DTCC will continue to work collaboratively with the T+2 ISC and other industry partners to offer guidance and support as this important initiative moves forward,”

“The timeline shared by the ISC is achievable, but it’s important that organisations begin preparing as we approach the next phase of the T+2 migration.” added Kathleen Joaquin, co-chair of the ISC and chief industry operations Officer, Investment Company Institute (ICI).

Further information and updates on the T+2 migration is available at


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