Standing Settlement Instructions and ALERT Under T+1

Updated October 2026, after T+1 took effect. First published January 2024 as a podcast review.

A standing settlement instruction (SSI) tells a broker where to deliver a client's securities and cash: the custodian, the account, the depository, and the agent details for each market and security type. Somebody sets it up once and every later trade reuses it. That's the point of an SSI, and it's also why one wrong instruction breaks every trade that picks it up.

Under T+2, a broker that found a mismatched SSI on the morning after trade date still had a full day before settlement. Under T+1, that morning is settlement day. The DTC affirmation cutoff is 9:00 p.m. ET on trade date and the night cycle starts at about 11:30 p.m., so the instruction has to be right when the confirmation goes out. The trade lifecycle under T+1 shows where that sits in the evening.

Why SSIs Cause Fails

DTCC's ALERT product page says it directly: "outdated, incomplete or inaccurate SSI data continues to be a leading cause of trade exceptions and settlement failure." DTCC made the same argument to the SEC during the T+1 rulemaking. In its comment letter, DTCC ITP said wider use of standardized settlement instructions was critical to the risk of errors and fails in a T+1 environment. It cited an industry survey that found SSI problems are still one of the most common reasons trades fail (Release No. 34-96930, Part V).

The risk sits in the copies. When a custodian changes an account or an agent, each broker holding the old instruction has to learn about it and update its records. Janet Coughlan, a director of ITP product management at DTCC, wrote in June 2026 that sharing SSIs by email, spreadsheet, or nonstandard format keeps those errors and delays in place. She also wrote that "manual SSI validation and authentication is simply too slow and resource-intensive in a T+1 environment."

How DTCC ALERT Works

ALERT is DTCC's shared database of settlement instructions. Custodians, prime brokers, investment managers, and brokers store their SSIs there and share them with counterparties. ALERT validates the data as it's entered and notifies permissioned participants when an instruction is added, changed, or deleted. Used with DTCC's CTM matching service, it can add the right SSI to a trade automatically.

DTCC's page lists 18.4 million SSIs, with data as of June 2026, and says custodians and prime brokers maintain 57% of them. When DTCC passed 15 million SSIs in November 2023, it said 3,500 organizations used ALERT and 53% of the instructions came directly from source providers. It also launched two APIs then: Real Time Settlement, which lets managers pull an account's SSI data on demand, and Ready to Settle, which lists the market, security, and depository combinations set up for an account during onboarding.

The source-provider share is the figure to watch. When the custodian maintains its own instruction, the broker isn't relying on a version the adviser or client retyped.

What the SEC Did and Didn't Require

There's no SSI rule. The SEC considered a request to require that settlement instructions go out only once a trade is affirmed, and declined. It reasoned that an affirmation on trade date shows the trade is ready to settle without guaranteeing it will, because the parties may still need to make sure securities and funds are in the right accounts. The release says a broker-dealer can still set terms with a client or custodian for linking the two, in its written agreements or its policies and procedures under Rule 15c6-2.

SSI errors also fall inside Rule 15c6-2(b)(3), which requires a broker-dealer's procedures to cover how it will "investigate any discrepancies in trade information, and adjust trade information" in time to affirm on trade date. Rule 15c6-2 in Practice covers what those procedures should say.

What to Check

For each active institutional account, find out whether its SSI comes from the custodian as a source provider or from a copy someone entered. Start with the accounts that trade most.
Find out who receives SSI change notices at your firm and how long a change takes to reach the system that enriches trades.
Count SSI-related exceptions by counterparty each week and report them next to your affirmation rate. A counterparty with both problems needs a call.
Treat any SSI change that arrives by email as unverified until someone confirms it by phone with a known contact at the custodian. DTCC ITP told the SEC that cyber risk and fraud are reasons to manage SSIs centrally and send them over secure channels. Our post on settlement fraud covers how those schemes work.

Coughlan's article notes that the Financial Markets Standards Board has urged firms to automate SSIs by the end of 2026. Whatever tool you use, we'd give SSI maintenance an owner and a weekly number. Under T+1 it behaves like a trade-date control, and it should be supervised like one.

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.