About Settlement Optimization
As highlighted in its recent white paper, Modernizing the U.S. Equity Post-Trade Infrastructure, the Depository Trust & Clearing Corporation (DTCC) is exploring several ways to further shorten the trade settlement cycle beyond T+2, reducing risk and costs for members of the National Securities Clearing Corporation (NSCC) and The Depository Trust Company (DTC) by introducing new operational and capital efficiencies to transactional workflows.
The two key proposals from the white paper - Settlement Optimization and Accelerated Settlement – each build upon existing DTCC capabilities to significantly reduce capital requirements, mitigate systemic risk and lower operational costs, all while still preserving the resiliency of the current infrastructure.
Settlement Optimization proposes an alternative settlement model through the introduction of four primary processing enhancements. While each of the Settlement Optimization enhancements offers its own set of unique benefits, taken together these enhancements contribute to a more holistic and streamlined settlement process.
- Night Cycle Reengineering
- Intraday Settlement Slice
- Enhanced Asset Lending
- NSCC Pledge Facility
Based on feedback from the Settlement Optimization Industry Working Group, DTCC plans to implement each of the proposed settlement optimization enhancements separately beginning with night cycle reengineering.
|Settlement Optimization Resources|
|Early Transaction Submission Testing Yields Promising Results||Client testing is now available to submit transactions for processing earlier than the current input start time of 3AM in DTCC’s PSE region. Learn more in this DTCC Connection article.|
|DTCC Plans First Phase of Settlement Optimization with Implementation Targeted for Next Year||In this press release, DTCC has announced a timetable for the first phase of settlement optimization, a significant enhancement aimed at removing an entire market day of settlement exposure without eliminating a calendar day from the standard trade settlement process.|
|DTC Important Notice 8631-18: Settlement Optimization||The purpose of this DTC important notice is to provide clients with an overview specifically of the Night Cycle Reengineering component of Settlement Optimization, targeted for implementation in 3Q 2019, pending regulatory approvals.|
|NSCC Important Notice A 8553: Settlement Optimization||The purpose of this NSCC important notice is to provide clients with an overview specifically of the Night Cycle Reengineering component of Settlement Optimization, targeted for implementation in 3Q 2019, pending regulatory approvals.|
|Read the Modernizing the U.S Equity Markets Post-Trade Infrastructure white paper.|
|Learn more about Night Cycle Reengineering component in this DTCC Connection article.|
Learn more about the Intraday Settlement Slice component in this DTCC Connection article.
|Creating an Alternate Settlement Model with Settlement Optimization (part three)||Learn more about the Enhanced Asset Lending NSCC Margin Pledge Facility components of Settlement Optimization in this DTCC Connection article.|
|Discover how DTCC created a more dynamic and intelligent processing environment in this DTCC Connection article.|
|Watch DTCC’s Murray Pozmanter discuss 'Modernizing the U.S. Equity Markets Post-Trade Infrastructure' white paper in this Q&A from WFE.|