February 19, 2022
The stated rule should also be forward-looking beyond T+1 by 2024, with a goal of making settlements T+0. Same day settlement is essential for ensuring fair settlement on behalf of all participants. Settlement failures are completely manageable under a T+0 system and can be unwound so that all parties can resolve in a fair and timely manner.
A participants funds become allocated towards the security and unavailable for additional or alternative uses immediately from the point of purchase of securities, so it should be fairly common sense to move towards a system that can make these exchanges in a manner that is not only instant, but accurate and auditable - ideally in am automated fashion. Putting the focus on establishing a T+0 expectation by no later than 2025-2026 would enhance market efficiency.
You would not give someone payment in full for a house, car, or any other asset without the exchange being made immediately - To do otherwise would imply that the item you are purchasing is not actually owned by the entity attempting to sale the asset to you - so why should it be acceptable for securities?
Technology has exceeded the overall structure of the market to the point that falling further behind is putting the US marketplace at risk of obsoletion. Furthermore, the inability to keep up with the need to quickly adapt and process using beneficial technologies is nearing the point where failure to be preemptive in expectations will force a near total reform at a time where markets will be least able to accommodate it without significant interruptions overall.
To accept these shortcomings as status quo is to accept obsoletion for the US in future markets.