The Cost Side of T+1: Where Operations Spending Rose and Where Margin Fell
Updated October 2026, with two years of post-T+1 figures. First published April 2024.
When the SEC adopted T+1 in February 2023, it put the industry's one-time cost at $5.51 billion to $7.76 billion. For broker-dealers serving institutional investors, it expected "minimal ongoing direct compliance costs" once the transition was done. It also said it couldn't quantify the ongoing cost of having one less day to fix errors. Those figures are in the adopting release. Two years after go-live, both the savings and the costs have shown up, in different places and on different budgets.
Where Costs Went Down
Margin at the clearinghouse fell first. NSCC's clearing fund averaged $9.8 billion after T+1, down $3.0 billion (23%) from the $12.8 billion average of the three months before, according to the T+1 After Action Report. In a Citi survey of about 500 market participants published in September 2024, brokers and custodians named the roughly 30% cut in clearing margin as T+1's biggest effect on them, Bloomberg reported.
That's capital freed. The saving is what it used to cost to fund the deposit. The SEC expected lower clearing fund contributions to save the industry more than $25 million a year, an extrapolation from a 2012 study of the move from T+3 to T+2. Why margin fell with the shorter cycle is covered in The Case for T+1, so we won't repeat it here.
Fails held steady at the industry level: the CNS fail rate averaged 2.12% in July 2024, in line with T+2.
Where Costs Went Up
The biggest new cost is people in the evening. In 2025, 69.6% of U.S. allocations sent to DTCC's CTM service arrived between 4 p.m. and 7 p.m. ET, against a 9 p.m. affirmation cutoff, according to DTCC's 2025 report to the SEC. In Citi's survey, just over half of banks and brokers said T+1 had significantly affected their headcount, and 38% of respondents were moving staff, mostly in FX and funding. Shift differentials, overnight coverage, and supervisors on late shifts recur every month. They aren't in the SEC's per-firm estimates, which priced the transition project and stopped there. Our post on what T+1 changed for the people who trade and settle covers the time-zone side.
Funding costs rose for much of the buy side. In the same survey, 46% of buy-side respondents said they were covering significant funding gaps while working between T+1 and T+2 markets. That mismatch lasts until the UK, the EU, and Switzerland move to T+1, which is expected in October 2027.
Some of the project work also ran long. A 2025 Citi paper said 23% of firms' project activity for the North American move was scheduled for 2025 or later. Firms had put off the harder changes to forecasting, cash management, inventory management, and securities lending until the transition year was over.
The Manual Gap Is a Cost Line
DTCC's 2025 data shows trades on automatic affirmation (CTM's Match to Instruct workflow) affirmed on time 99.55% of the time and manual affirmations about 89%. Each manual trade is evening work for someone, and each late one is a possible fail. Before go-live, DTCC offered smaller manual investment managers a discounted "T+1 Automation Package" and later reported "minimal Client uptake." If your counterparties sit on the manual side of that gap, your staff carry the cost.
A Worksheet for Your Own Numbers
The SEC's estimate for each broker-dealer serving institutional investors was $8.74 million, one time. It assumed five operations specialists, five programmers, and one senior operations manager working for six quarters. Compare your actual project spend with that, then add the ongoing lines the estimate left out.
| Cost line | Direction since May 2024 | Where to find your number |
|---|---|---|
| Clearing fund deposits and their financing | Down | NSCC statements if you self-clear; clearing fees if you don't |
| Evening and overnight staffing | Up | Payroll: overtime and shift differentials after 5 p.m. ET |
| FX funding for non-U.S. clients and funds | Up for the buy side | FX desk: prefunding and overdraft costs |
| Manual affirmations and exceptions | Depends on your counterparties | Trades affirmed by hand, by counterparty, from your affirmation data |
| Fails | Flat at the industry level | Fail charges, buy-ins, and Regulation SHO close-outs |
For introducing brokers, the margin saving lands at the clearing firm first. The SEC noted that clearing members may pass lower margin requirements through as lower fees, which isn't the same as saying they will. Whether yours did is a question for your next contract review, and our post on T+1 from the clearing firm's side lists what else to ask.
This post is for informational purposes only and does not constitute legal advice. For guidance on specific regulatory obligations, consult your counsel or compliance advisor.