COMMENTARY — Feb 09, 2024

The Affirmation Race: 90% Affirmation Rates by 9:00PM EST

The Depository Trust Clearing Corporation's (DTCC) paper, published on the 30th of January, 2024, entitled "The Key to T+1 Success: Hitting 90% Affirmation by 9:00 pm ET on Trade Date" can, and should, act as a reliable benchmark for any firm seeking to know their current standing on T+1 readiness.

The target of hitting 90% affirmation is based on trades affirmed on T+1 (11:30 am EST) that settle under the current T+2 timeline while also avoiding potential increase in trade fails. However, from the DTCC test cycle, the data highlighted that only 69% of all trades (78% of NSCC - National Securities Clearing Corporation and roughly 56% of DTC - Depository Trust company trades) affirmed by T 9:00 pm EST.

Within the US settlement market, affirmation is an action taken by a custodian, investment manager (IM), or prime broker to agree the details of the Broker's TradeSuiteID confirm. Outside the US, affirmations are generally processed within the central securities depository (CSD) system, known as pre-settlement matching between the local broker and the local custodian (acting on behalf of the investor). The difference is, if the trades are not matched within the non-US market, the trade will not be moved for settlement and will also incur late matching and late settlement fees from the CSDR. However, within the US market, unaffirmed trades by T 9:00 pm EST, can be submitted directly to DTC by T 11:30 PM EST (Night Delivery Order) or T+1 3:00 pm EST (Day Delivery Order) but with costs three times more for the deliverer and two times more for the receiver.

So how can the market reach 90% affirmation rate?

  • IMs using Custodian to affirm the trades: Investment managers can opt to use unique TradeSuite ID number instead of using Custodian's omnibus TradeSuite ID number as it will promote transparency and clear visibility on the status of the trades. This would also mean IMs get their allocations matched by T 7:00 pm EST and pass the settlement instruction to Custodian at the earliest for it to be affirmed by a Custodian on T 9:00 pm EST.
  • IMs self-affirming the trades: Reduces the additional need for passing the settlement instruction to custodian as IMs can directly affirm the trades, however usage of their unique TradeSuite ID would be much more preferrable.
  • IMs using M2I: Maximum affirmation rates can be achieved by auto affirmation using Central Trade Matching (CTMs) and Match 2 Instruct (M2I) workflow, as CTM will automatically affirm the transaction in TradeSuite and further processed to DTC for settlement.

It has now become crucial for firms to transform their middle to back-office functions and processes to optimize efficiency considering the accelerated settlement cycle.

A robust securities processing solution:

At S&P Global Market Intelligence, we help clients on their digital transformation journey with our Securities Processing Solution, delivering a smooth transition from legacy platforms to state-of-the-art technology solutions. We enable organisations to enhance their entire post-trade operation, while increasing straight-through processing (STP), and reducing the time, effort, and overall risk involved. To learn more, visit our website.


S&P Global provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.


This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.