In preparation for the US equity market’s transition to a T+1 settlement cycle scheduled for May 28, 2024, State Street Corporation (NYSE: STT) today announced that it is offering an automated workflow solution and integration with DTCC within State Street’s foreign exchange (FX) trading service, StreetFXSM. DTCC is the premier post-trade market infrastructure for the global financial services industry.
By connecting to DTCC Institutional Trade Processing (ITP) and its central trade matching platform, CTM®, StreetFX is now able to receive settlement instructions from DTCC ITP for match agreed CTM transactions. StreetFX automatically executes the required FX trade necessary to fund the purchase or sale of the related securities transaction at the next scheduled execution time designated by the client, streamlining the FX lifecycle and enabling a faster no-touch post-trade processing workflow. When leveraged in conjunction with the CTM Match to Instruct (M2i) workflow, StreetFX executes the necessary FX trade shortly after the affirmation of the securities trade and staging at the DTCC for T+1 settlement.
Consistent with State Street’s mission of helping to improve outcomes for investors, cutting down on settlement time for FX transactions from T+2 to T+1 will lead to shorter trade cycles for investors, thereby helping to reduce counterparty risk.
“State Street is helping to drive solutions that address critical performance drivers by rolling out an automated FX execution solution to facilitate the US securities market’s transition to T+1 settlement,” said Tony Bisegna, head of State Street Global Markets. “This innovative advancement is another example of State Street’s commitment to providing industry-leading firsts to our clients.”
“CTM’s open architecture enables us to work with multiple firms within the industry to support the industry’s move to T+1 next year. We are pleased that our collaboration with State Street reinforces that CTM represents an efficient and cost-effective solution to address the FX trading challenges that come with a shorter settlement cycle,” said Val Wotton, DTCC managing director and general manager, ITP. “We look forward to working with a broad range of market participants over the coming months to help them prepare for a seamless transition to T+1.”
StreetFX is State Street’s fully-automated Benchmark Foreign Exchange, custodian agnostic, execution platform with a rules-based workflow designed to increase transparency and efficiency in FX trading. It seamlessly integrates within clients’ existing infrastructure to create an end-to-end solution that increases consistency and decreases operational risk.
CTM is a central matching platform used by end-user clients to allocate and centrally match transactions globally across multiple asset classes.
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