Wall Street braces for faster trade settlement

NEW YORK - U.S. trading moves to a shorter settlement on Tuesday, which regulators hope will reduce risk and improve efficiency in the world's largest markets, but is expected to temporarily increase transaction failure for investors.

Trades fail when a buyer or seller does not meet their trading obligation by the settlement date, which could result in losses, penalty fees and hurt reputations. On Wednesday, there will be another big test for the market as trades executed both on Friday, when T+2 was still in place, and on Tuesday, the first day of T+1, will be settled, leading to an expected rise in volume.

Brian Steele, president of clearing and securities services at DTCC, said more than 90% of the industry has been participating in the process since testing started in August 2023. There is still "a deep level of muscle memory" from the industry's move to T+2 in 2017, he said.Trade bodies say the shift will mitigate systemic risk because it reduces counterparty exposure, improves liquidity and decreases margin and collateral requirements.

Source: Digital Coin News (digitalcoinnews.net)

Market Participants Settlement Rates U.S. Securities And Exchange Commission Settlement Failures Transaction Costs Depository Trust And Clearing Corporation Securities Gary Gensler Depository Trust Company

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