Since T+1 implementation in the US, affirmation rates have risen to 94.55%, according to DTCC.
This marks a substantial increase from January 2024, where the percentage of transactions affirmed by the Depository Trust Company (DTC) cutoff time (9:00 PM ET on trade day) was 73%.
Improvements were seen across the board, with the self affirmation rate of custodians and investment managers rising most drastically from January (51% to 84.29%). The investment manager auto affirmation rate was up to 97.5%, from 92% in January, while prime broker affirmation increased from 81% to 98.6%.
Commenting on these results, Brian Steele, managing director and president of clearing and securities services at DTCC, said: “After working closely with the industry for over three years, we are pleased these efforts are driving a smooth transition, including very high same day affirmation rates.”
Fail rates have also fallen since T+1 came into play, with the CNS fail rate dropping to 1.9% on 29 May – down from the 2.01% average rate for T+2 settlements in May – and the DTC non-CNS fail rate falling to 2.92% from 3.24% over the same time period.
The National Securities Clearing Corporation’s (NSCC) clearing fund decreased by 29% on last quarter’s average value to US$9.1 billion following the move to T+1, and dropped by 25% from last month’s average value.
Tim Cuddihy, managing director and group chief risk officer at the corporation, commented: “One of the key industry benefits of T+1 is the significant decrease in clearing fund requirements, which have decreased by around $4 billion – a significant reduction that is enhancing liquidity, increasing efficiency and mitigating risk for market participants.”
Steele concluded: “While we are proud of this progress, we will continue to collaborate with SIFMA, ICI and the industry to ensure a successful T+1 implementation in the coming days and weeks.”
©Markets Media Europe 2024
