A new survey from SS&C Technologies Holdings, the T+2 Preparedness Survey, has evaluated firms’ planning for and attitudes towards the upcoming change to the new settlement cycle.
And according to the findings, the majority of firms have started their assessment of technology and operations preparedness – 66 per cent and 72 per cent respectively – well in advance of the 2017 implementation of T+2 settlement. According to the survey, those who have not started these assessments largely indicated they would begin in the first half of 2016. A small number of respondents, solely from buy-side firms, noted they would wait until 2017 to assess their operational preparedness.
The survey of 50 executives from buy-side, sell-side, and custodian firms, conducted at the ISITC Annual Forum last month, found that central matching is largely viewed an advantage in a T+2 cycle, particularly among buy-side firms. In addition, seventy-eight per cent of respondents believe it is likely or possible the US will move to T+1 within the next decade, while more than half have or will increase their technology budget to support infrastructure improvements for T+2, and buy-side firms are least likely to increase their technology budget to support upgrades for T+2 (60 per cent will maintain the same budget).
"Firms are operating in a dynamic environment that requires agility, efficiency, and reliability. The survey findings show a widespread awareness in the industry regarding the need for adequate preparation time and a commitment to maintaining a robust technology infrastructure," says Bob Moitoso, Senior Vice President and General Manager, Financial Markets, SS&C Technologies. “We counsel customers to be proactive in their approach despite the long lead time to prepare, and the survey feedback really resonates with that guidance – if you haven’t started, you’re already behind.”
The top priority amongst all executives surveyed (34 per cent) is to invest in using third party products and solutions to automate the post-trade cycle. Nearly half (48 per cent) of buy-side respondents noted this as their firm’s top priority; however, nearly half (47 per cent) of custodians indicated they would prioritize investing in emerging technologies, such as applying Blockchain, to the post-trade cycle. Sell-side respondents reported being more focused on leveraging investments in the front office with FIX to help automate the post-trade cycle.
