DTCC Consulting Supports Clients Through Change

§ 01 Executive Snapshot

• What: DTCC Consulting is enhancing support for clients amid regulatory changes and the transition to T+1 settlement cycles.
• Who: Rebecca Ashton, global head of DTCC Consulting, and DTCC as a leading post-trade infrastructure provider.
• Why it matters: The shift to T+1 settlement and the move towards 24-hour operations represent significant changes in the financial industry, impacting how trades are settled and processed.

§ 02 Key Developments

• DTCC is supporting the transition to a one-day settlement cycle (T+1) in Europe, expected to occur in 2027, following a successful implementation in the U.S. in 2024.
• A recent survey indicated that 39% of industry respondents are actively implementing or testing for T+1, while 49% are still assessing requirements.
• DTCC Consulting has created a retainer model allowing clients to access half a day of expertise to address specific challenges presented by industry or regulatory changes.

§ 03 Strategic Context

• The establishment of DTCC Consulting five years ago was driven by client demand for support in navigating changes in regulation and operational practices in the post-trade landscape.
• The transition to T+1 in Europe is complicated by the diverse regulatory and operational landscape, including multiple central securities depositories (CSDs) and differing legal frameworks across countries.

§ 04 Strategic Implications

• The immediate implication of DTCC's consulting services is an enhanced ability for smaller institutions to access high-quality advisory support, leveling the playing field with larger market participants.
• Long-term, the move towards T+1 and 24/7 trading may require significant investments in technology and infrastructure from financial institutions, shaping the future of post-trade operations.

§ 05 Risks & Constraints

• Potential execution roadblocks include the varying readiness of different institutions to adapt to T+1, especially smaller firms lacking resources.
• Competition among CSDs in Europe may complicate the transition to T+1, as coordination across multiple entities is inherently more challenging than in the U.S.

§ 06 Watchlist / Forward Signals

• The upcoming launch of DTCC's tokenization service in October, which will execute initial production trades in July with over 20 participating firms.
• Monitoring client readiness and industry adaptation to T+1 through ongoing webinars and data analysis from Central Trade Matching (CTM) will provide insights into market preparedness and efficiency improvements.