Capital markets participants in the US remain on track for meeting revised T+1 timescales and straight-through processing objectives according to speakers at a Securities Industry Association STP and T+1 conference in New York.
"While firms have refocused their priorities as a result of the economic downturn and the events of September 11, they continue to implement the necessary adjustments to their own systems for the transition to straight-through processing and T+1," says Donald Kittell, SIA's executive vice president. "The progress reports from the project management office showed a significant percentage of completed steps."
Kittell points out that, of the 250 milestones set by the STP/T+1 subcommittees, 119, or 48 percent have already been completed, 40 (16 percent) are following the same or an accelerated schedule, and 91, or 36 percent, have been revised based on the extended target date.
The industry group has unveiled a series of process flow charts illustrating how retail and institutional equities, corporate bonds, and all other products that currently settle in a T+3 environment could be processed on a trade date plus one schedule.
"Project managers at the firms can take these charts, superimpose charts of their own internal processes, and visualise how the new flow will affect internal processing," says Kittell.
The project management office, staffed by Capco, updated attendees on the new timeline for the transition to straight-through processing and T+1. The reports showed renewed emphasis in a number of areas, including the development of a best practices document by the payments subcommittee on the elimination of risk, and the institution of a new working group to address the dematerialisation of physical certificates and Direct Registration System positions via the T+1 environment.
Among those target dates that have been revised are the publishing date for the revised ITPC model, which was moved from December 31, 2001 to March 31, 2002, and the date when all firms will go live in a T+3 environment with the virtual matching utility, which has been moved from June 30, 2003 to June 30, 2004.
The conference also included a special report on how the latest developments in straight-through processing affect the buy-side firms, and input from regulators on the status of rule changes necessary for the transition to T+1.