Depósito Central de Valores informs you that the U.S. Securities and Exchange Commission (SEC) announced its decision to reduce the settlement cycles of the securities purchase and sales transactions from two business days (T+2) to one business day (T+1) to become effective on May 28, 2024 (Rule 15C6-2). The change aims to make the market infrastructure more efficient, so it is important to understand the impact of T+1 in the post-negotiation transactions and processes.
DCV, together with its cross-border custody providers, is working on detecting any changes to the transaction processes that DCV may face in its role as a custodian, as well as those that affect the clients that invest in the United States market.
It is important to mention that the settlement flow change to T+1 requires DCV depositors to review their internal impacts (money desk, back office) and contact their foreign counterparts to check together any possible modifications to their current procedures.
This regulatory change makes the affirmation process for transactions negotiated in the market in T (negotiation date) compulsory, which, up to date, was voluntary, significantly reducing the hours available to do the post-negotiation coordination, including the instructions registry in DCVe. Therefore, it becomes relevant to discuss and raise any concerns with their counterparts who must, by law, abide by the affirmation process.
Next milestones to be informed:
- Change in the cutoff times to receive instructions.
- The dates on which DCV will start the T+1 flow tests with our custodian Citibank and the corresponding results.
- Amendment of external user guides, if applicable.
Please contact the DCV Commercial Department if you have any questions to solve them in a timely manner and face this change together.
For more information, please check the DTCC (United States Central Securities Depository) website at https://www.dtcc.com/ust1.
DEPÓSITO CENTRAL DE VALORES S.A.,
DEPÓSITO DE VALORES