STP Institute

Are You Ready for It? Preparing for the Move to a T+1 Trade Settlement Cycle

In February 2023, the Securities and Exchange Commission (SEC) announced a move to a T+1 trade settlement cycle expected in May 2024. This move means that securities transactions must settle one business day after the trade date. Up until this point, the trade settlement cycle has been two business days (T+2). While halving the time to settlement may seem like an aggressive jump, the goal of the move is to make markets more efficient for investors and to reduce risk—just a couple of the long list of benefits that come with T+1. But that doesn’t mean there won’t be challenges.  

SEC’s 2025 Priorities Include Fiduciary Conduct, AI Use

STP’s Lori Weston, Director of Product and Strategy was mentioned in planadviser’s SEC’s 2025 Priorities Include Fiduciary Conduct, AI Use.

The Securities and Exchange Commission will prioritize fiduciary conduct, compliance, and the use of artificial intelligence, among other things, as examination priorities in 2025, the regulator’s division of examinations announced Monday.

SEC rethinks RIA registration threshold

The acting chair of the Securities and Exchange Commission (SEC) has asked for a review of the registration threshold for RIAs, a move that compliance experts said could overburden state governments.

Since the passage of the Dodd-Frank Act by Congress in 2010, RIAs with over $100m in assets under management have largely been required to register with the SEC as opposed to a state government, up from the $25m threshold that the federal government had in place prior to the legislation. SEC acting chair Mark Uyeda in a Tuesday speech floated the idea of raising the threshold further in an environment where the SEC faces staff attrition and scrutiny of its activity from the Trump administration.

While they acknowledged the need for a new look at defining RIA size from a regulatory point of view, compliance experts expressed concern about stretching state governments too thin.

‘My first reaction was wow,’ said Lori Weston, head of compliance at STP Investment Services, referencing the possibility of a $1bn registration threshold.

‘If mid-sized is under a billion, these firms are looking at not only understanding and complying with their own principal state regulations, which vary from the Advisers Act, but also multiple other states,’ Weston said.

Read what Lori and other subject matter experts had to say here.

STP mentioned in WatersTechnology: Zeros and ones: Industry contemplates T+0 as the next step

All hands on deck—that was likely the directive for operational teams across US capital markets on May 28, 2024, the day when settlement cycles in North America moved from T+2 to T+1.