DTCC reported a 1.90% CNS settlement-fail rate for 29 May, following the United States transition to T+1. The preceding May average under T+2 was 2.01%.
From 28 May, T+1 shortened standard settlement from two business days after trading to one.
The separate DTC non-CNS measure was 2.92%, against its earlier-May average of 3.24%.
Reuters reported that participants considered the observation period too short to establish sustained performance.
Preparation
DTCC's 13 May update documented preparations. During April, 59 investment managers joined the CTM automatic-affirmation workflow, taking participation to 458 firms. Of these, 350 had been enabled for the Match to Instruct workflow. The update also recorded hypothetical outage-scenario exercises involving buy-side firms, sell-side firms and custodians.
Its April aggregate affirmation measure was 83.5%, compared with 74.95% in March.
That measure used the DTC cutoff of 9pm Eastern Time on trade date.
Affirmation means participants have checked and agreed transaction details.
Institutional processing requirements
The SEC's 21 May statement described accompanying changes for several types of intermediary:
- New processing requirements for broker-dealers.
- Recordkeeping requirements for registered investment advisers.
- A requirement for central matching service providers to facilitate straight-through processing.
These provisions formed part of the rules adopted on 15 February 2023.
The staff bulletin defined settlement as transferring securities to the buyer's account and money to the seller's account, rather than executing the trade.
Transition calendar
NYSE Regulation's 31 January guidance for NYSE American issuers set out an ex-dividend timetable. It said no securities would become ex-dividend on 28 May. Securities with a 28 May dividend record date would trade ex-dividend on 24 May; those with a 29 May record date would trade ex-dividend on 29 May. It noted the 27 May Memorial Day closure. It described the exchange's transition arrangements.