Automation of SSIs key to a successful T+1 implementation
The UK T+1 Accelerated Settlement Taskforce (AST) has published its implementation plan for the UK’s transition from T+2 to T+1 securities settlement.
The implementation plan includes a UK T+1 Code of Conduct (UK-TCC) for market participants, which confirms five behavioural commitments, including a push for automation in Standing Settlement Instructions (SSIs).
The implementation plan states:
- We believe automation is key to the successful implementation of many of the actions recommended in UK-TCC.
- We highlight three specific areas in which we believe automation is critical: [Firstly,] Automation of [SSIs].
- All UK market participants are expected to use [SSIs].
- Any changes to existing or new SSIs should be notified in good time before the change is effective ideally using a market standard automated solution.
- Where possible, SSIs should be communicated prior to trade execution, and firms whose trading models preclude this are even more strongly encouraged to use automated solutions to allow for the timely settlement of trades in a T+1 environment.
- In the majority of instances SSIs should remove the need to exchange transaction specific settlement instructions and once in place will be used for settlement of all specified transactions between two counterparties.
- It is good practice where multiple accounts exist, to include both parties’ SSIs on trade confirmations as an additional cross-check before the movement of funds.
Bill Meenaghan, CEO of SSImple, said: “The AST’s plan – backed by HMT, FCA, and Bank of England – makes clear that automation of SSIs is vital for T+1 success. If firms haven’t started planning, now is the time. I would like to congratulate Andrew Douglas on his chairmanship of the AST. This plan is the result of two years of dedicated industry collaboration.”
To discuss this more, including the detailed timeline of dates, please get in touch.
