In May, SIA announced it would undertake a reevaluation of the industry's projected costs and benefits of the move to T+1 by 2005, in light of shrinking IT budgets and shifts in business strategy since September 11.

Yesterday's announcement reveals the evidence brought forward from the review board for T+1 is still uncertain. Allen Morgan, chairman of the SIA's board and chairman and CEO of Morgan Keegan & Company, states: "The industry needs to focus on more effective straight-through processing before it is in a position to fully evaluate a conversion from T+3 to T+1 settlement. We believe that the settlement period should be evaluated again in 2004."

SIA will introduce a new two-year programme that will concentrate on straight-through processing in 2003 and 2004, rather than on shortening the settlement cycle to T+1 in 2005. Key projects will include improved processing of institutional trades; electronic book entry to replace physical securities and payments; and, a range of other automation projects which address the processing of corporate actions (such as recapitalisations and dividends), stock lending, syndicate underwriting, and other operations functions.

Marc Lackritz, SIA's president, says: "The work of hundreds of industry volunteers on the STP/T+1 programme over the last three years has provided a solid platform and clear direction for industry STP priorities in 2003 and 2004."

"The board's decision to focus attention on STP reflects the industry's continuing commitment to investing in new clearance and settlement technology," he adds.

An SIA STP Steering Committee will also be established, made up of senior technology and operations executives drawn from the industry. The committee will be chaired by Jeffrey Bernstein, senior managing director, Bear, Stearns and Co.