As part of the Heard at Ops series, 鲍勃·韦利 of Deloitte describes where firms should be now in their journey to T+1 and the considerations and types of testing that everyone across the industry must plan for. Watch the video and read the Q&下面一个.
Q. The T+1 Playbook was updated to include the SEC’s final rule for Accelerating 结算 and the transition date of May 2024. Where should firms be now in their journey to T+1?
T+1 has been an industry hot topic since February of 2021 and SIFMA, 这里, 存 and Deloitte have been a big part of moving that transition forward. And it was great to get the final rule to come out of the SEC in February of 2023.
But what that has done is it’s given us a limited window from which firms need to be ready. So, firms need to make sure that they have their program offices up and running, that they truly understand their books of work, and that they have allocated the funding required. Then firms need to go into a very detailed analysis to know:
- Why are they having settlement breaks?
- What types of funding requirements will they have?
- What kinds of operational challenges are they facing?
While firms have been at this a long time, it still feels that we have not gotten granular enough. We need to dig further to solve some of these problems. Once the settlement cycle moves to T+1, we move from 19 hours of getting information into the central repository to 5 hours.
Q. What are some of the challenges and considerations that firms must plan for?
The analysis of all the systems that contribute to 帖子-trade activity needs to be looked at. Some firms have 500-600 systems that are part of their ecosystem that produces data, that send one file from one system to another. Firms need to understand the interdependencies of those systems and the data so that the nightly cycle will work.
We then need to test the entire environment for resiliency, to work through the nitty gritty details including:
- Understanding when there is an outage.
- Having the ability to detect that outage.
- Being able to resolve or recover from that outage.
My suggestion is that every firm should be looking at what happens throughout their systems on a minute-by-minute basis after 4:00 on trade date, 一直到T+1频道4点, and to know what the systems are producing and to understand the resiliency factors that need to be incorporated.
Testing is going to be one of the most critical points of this. 让我担心的是: 我们时间够吗? We are not going to rush the testing. We were successful in 2017 with T+2 because of all the testing we did. In 2023 and 2024, we have gotten a much more compressed timeline to make sure this happens.
Related: The T+1 testing window is now open – find out more
Q. Describe the different types of testing for T+1.
The three dimensions of testing needed for a successful transition are:
- 公司测试 – In addition to system changes, firms will need to test at the transactional level. We are not going to have as many functional changes for T+1, but we will see a lot of testing across different asset classes.
- 客户端测试 – It is very important for firms to reach out to their clients and coordinate testing with them. 客户端s, too, are making technology changes and improvements to their ecosystems to comply with T+1. This testing goes both ways: from firm to client, and client to firm.
- 行业测试 – There is a tremendous amount of attention being paid to industry-wide testing, 8月14日上映, 2023, and 存 is being very thorough communicating with the industry.
鲍勃·韦利 是主要的, Financial 服务 at Deloitte and is working with SIFMA, 这里 and 存 as part of the PMO for the transition to T+1.
This article was originally published to SIFMA 2023年8月7日.