March 8, 2022
As a retail investor and passionate advocate for market reform, I fully support this rule proposal to reduce settlement times to T+1, however, I disagree with the length of implementation. Technology has and will continue to evolve at an exponential rate. Even in its current state, technology could expedite settlement times to T+1, likely even T+0. The adoption of blockchain technology and its impact on decentralization of finance should be enough incentive for the SEC to consider shortening the implementation period for this rule. The investing public is beginning to lose faith in the stock market. The DTCC has openly stated the T+1 will allow for major cost-savings, reduced market risks, and lower margin requirements. If the SEC chooses to wait to implement this rule until 2024, retail investors at least deserve to know WHY this rule cant be implemented for 2+ years because change was needed yesterday, not in 2024.
Not only should the SEC consider amending this rule to propose a more immediate or shorter implementation period but should consider a supplemental rule to implement same day settlement to ensure 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.
When a participants funds are allocated to a security, they immediately become unavailable for additional or alternative uses. You would not give someone payment in full for a house, car, or any other asset without the exchange being made immediately. It should be common sense that securities should be held to this same standard, and a move towards a T+0 system that can make these exchanges in an instant, automated, and accurate manner. When the inevitable mass adoption of decentralized finance comes to fruition, will the current system warrant enough trust for the public to fight off its demise? Retail investors will eventually realize that T+1 could have been an immediately achievable system and this rule could have reasonably been implemented to incorporate a future T+0 implementation date.
Please put yourself in the shoes of an individual investor for a moment and think about this question: Will the general investing public still want to keep their money in the stock market when they realize that technology already exists that immutably incorporates T+0 settlement AND allows for secure, individual ownership of assets? If the looming mass adoption of decentralized finance isnt enough to expedite this rule and push for T+0 settlement time by 2024, what is? If the SEC doesnt act swiftly to gain retail investor trust, I fear for the hard-working Americans who trusted this system with their life savings who will once again pay the price for Wall Streets greed.