Investment Operations

T+1 Implementation: Buyside Perspective

Categories Operations

Course Instructor

Course Level

Intermediate

Certification

Certificate

Delivery

Via Zoom

Hours (EST)

1:00 pm - 5:00 pm​

Description

Date: TBD

The T+1 Implementation: Buyside Perspective half-day virtual course is geared toward senior-level staff that wants to gain a better understanding of the issues surrounding the implementation of the T+1 Settlement Cycle. We will go beyond the FINRA T+1 Implementation Handbook which deals with discrete tasks and explore how to access the implications of moving to T+1 from a risk perspective. This will lead us to a more detailed examination of the modifications in the roles traditionally assigned to operational staff and the skills that must now be added to these positions. We end the day with a session devoted to your concerns about how to move the firm to the level of preparedness needed to achieve a successful transition to T+1. 

Prerequisites: None

Agenda

Why is T+1 more than just upping the settlement date by one day?

(We will reference the FINRA Document as we go through the various sub-headings to highlight the difference between the tasks outlined and the more holistic view we are presenting to see what needs to be done beyond the checklists provided by FINRA.)

  • Risk, if not managed, moves from the Risk Management part of the firm to the trade processing clerks
    1. Improperly flowed data will cause fails and hence risk
  • Managing the risk means coordination with both internal and external stakeholders to insure that information flow proceeds within the timelines proposed
    1. Rearrange workflow and cutoffs to insure that information flows promptly and accurately regarding new accounts, account changes, money movements
    2. Rearrange work times of trade processing clerks, new account clerks, trade balancing and settlement clerks
    3. Coordinate with service bureaus and external trade notification and affirmation processing systems
    4. Update in real-time systems on S/D to reflect accurate fails and money information

Workflow Re-Engineering

  • What are the areas of concern?
  • Where are the areas of greatest vulnerabilities since the completion of activities is dependent on outside participants (custodian, brokers)
    1. New Account Information – New accounts, account changes that affect settlement: Coordinate data flows with Sell Side, Custodian
    2. Securities Master – New securities, correction of indicative information that is wrong: Coordinate data flows with Sell Side, Custodian
    3. Trade Feeds – Insuring that all executions are retrieved and accounted for on a timely basis. Integration with Sell-side systems as well as internal OMS: Multiple execution brokers, settlement Prime or Custodian
    4. Trade Allocations- Can only happen if the previous three are correct and all parties agree to the information
  • Same-day balancing functions with sell-side and custodian
  • Exception procedures that must be implemented within the trade cutoff times
  • Exception procedures that must be implemented on S/D forward for errors/fails

Money Imbalances as a result of fails, failed wires etc.

Computer system knowledge of money position vs. reality

Implications:

  1. Margin calls
  2. Trading limitations
  3. Missed opportunities
  4. Stock Loan
  5. Borrowing and implications – Reg Sho
  6. Lending- getting stock back on a timely basis

Open Discussion laying out the timeline vs where the organizations are:

  1. Your level of preparation
    • What steps will you take to prepare your timeline and restructuring?
  2. Vendors’ level of preparation
    • How advanced are your vendors in their work and how well are they coordinating with you?
  3. Regulatory Open Issues

Summary & Questions

In-House Training

Custom Training can help you achieve your corporate training goals while staying on budget and focusing the content on the needs of your group. Email your questions regarding corporate training to training@investmentoperations.net.

2023 Training Calendar

Training Catalogue

Course Instructor

Course Level

Intermediate

Certification

Certificate

Delivery

Via Zoom

Hours (EST)

1:00 pm - 5:00 pm​

Description

Date: TBD

The T+1 Implementation: Buyside Perspective half-day virtual course is geared toward senior-level staff that wants to gain a better understanding of the issues surrounding the implementation of the T+1 Settlement Cycle. We will go beyond the FINRA T+1 Implementation Handbook which deals with discrete tasks and explore how to access the implications of moving to T+1 from a risk perspective. This will lead us to a more detailed examination of the modifications in the roles traditionally assigned to operational staff and the skills that must now be added to these positions. We end the day with a session devoted to your concerns about how to move the firm to the level of preparedness needed to achieve a successful transition to T+1. 

Prerequisites: None

Agenda

Why is T+1 more than just upping the settlement date by one day?

(We will reference the FINRA Document as we go through the various sub-headings to highlight the difference between the tasks outlined and the more holistic view we are presenting to see what needs to be done beyond the checklists provided by FINRA.)

  • Risk, if not managed, moves from the Risk Management part of the firm to the trade processing clerks
    1. Improperly flowed data will cause fails and hence risk
  • Managing the risk means coordination with both internal and external stakeholders to insure that information flow proceeds within the timelines proposed
    1. Rearrange workflow and cutoffs to insure that information flows promptly and accurately regarding new accounts, account changes, money movements
    2. Rearrange work times of trade processing clerks, new account clerks, trade balancing and settlement clerks
    3. Coordinate with service bureaus and external trade notification and affirmation processing systems
    4. Update in real-time systems on S/D to reflect accurate fails and money information

Workflow Re-Engineering

  • What are the areas of concern?
  • Where are the areas of greatest vulnerabilities since the completion of activities is dependent on outside participants (custodian, brokers)
    1. New Account Information – New accounts, account changes that affect settlement: Coordinate data flows with Sell Side, Custodian
    2. Securities Master – New securities, correction of indicative information that is wrong: Coordinate data flows with Sell Side, Custodian
    3. Trade Feeds – Insuring that all executions are retrieved and accounted for on a timely basis. Integration with Sell-side systems as well as internal OMS: Multiple execution brokers, settlement Prime or Custodian
    4. Trade Allocations- Can only happen if the previous three are correct and all parties agree to the information
  • Same-day balancing functions with sell-side and custodian
  • Exception procedures that must be implemented within the trade cutoff times
  • Exception procedures that must be implemented on S/D forward for errors/fails

Money Imbalances as a result of fails, failed wires etc.

Computer system knowledge of money position vs. reality

Implications:

  1. Margin calls
  2. Trading limitations
  3. Missed opportunities
  4. Stock Loan
  5. Borrowing and implications – Reg Sho
  6. Lending- getting stock back on a timely basis

Open Discussion laying out the timeline vs where the organizations are:

  1. Your level of preparation
    • What steps will you take to prepare your timeline and restructuring?
  2. Vendors’ level of preparation
    • How advanced are your vendors in their work and how well are they coordinating with you?
  3. Regulatory Open Issues

Summary & Questions

In-House Training

Custom Training can help you achieve your corporate training goals while staying on budget and focusing the content on the needs of your group. Email your questions regarding corporate training to training@investmentoperations.net.

2023 Training Calendar

Training Catalogue

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