The Depository Trust & Clearing Corporation (DTCC) says it will continue with technology upgrade plans for straight-through processing, despite a one-year delay in implementing T+1.
"The changes we now have under way, while prerequisites for both straight-through processing and T+1, are much broader in scope and offer a number of benefits to the industry even without T+1 implementation," says Dennis Dirks, DTCC’s chief operating officer. "Consequently, we intend to push ahead and adhere as much as possible to the schedule we originally established."
Dirks says all the changes planned for the next two years will help to simplify and streamline industry practices both in the United States and internationally. Items on the agenda include the development of a common front-end for fixed income issues, risk reduction efforts revolving around the provision of real-time access to trade clearance and settlement information, the implementation of a single settlement system for DTC and NSCC and a major rewrite of the Continuous Net Settlement (CNS) system to eliminate redundant reports and speed the settlement process.
"The benefits of these and other changes we are making go well beyond T+1 implementation," Dirks says. "For example, it is why we’re trying to complete - before year-end - the synergies we can leverage from consolidating the clearing corporations for government securities, mortgage-backed securities and emerging-market debt under DTCC."
The Securities Industry Association (SIA) recently announced a decision to push back implementation of the shorter settlement cycle from June 2004 to June 2005 to give industry participants more time to make the required changes to their systems.