T+1 Fails on May 29, 2024: The Real Numbers and a Hypothetical Firm Failure
Updated October 2026, after T+1 took effect. First published February 2024.
When this post first ran in February 2024, it imagined a broker failing to meet T+1 on May 29, 2024. It used an invented firm, an invented SEC investigation, and an invented statement from the SEC chair. None of that happened, and we've removed it. This version reports what DTCC and the industry groups published about go-live week. After that comes a hypothetical, clearly labeled, of what a failure at one firm would cost under the rules as they stand.
Why May 29 Was the Day to Watch
The last T+2 trade date was Friday, May 24, 2024. Monday, May 27 was Memorial Day, and Tuesday, May 28 was the first T+1 trade date. Friday's trades settled on T+2 and Tuesday's on T+1, so both landed on Wednesday, May 29, which the industry called the "double-settlement" day.
SIFMA ran the T+1 Industry Command Center from May 24 to May 31 with ICI and DTCC, and it kept a bridge line open for more than 48 hours from May 28 to May 30 while firms worked through the double settlement. Our look back at DTCC's readiness program covers how the industry prepared for that week.
What the Numbers Showed
DTCC published first results on May 30, 2024.
| Measure | May 29, 2024 | Comparison |
|---|---|---|
| Transactions affirmed by DTC's 9:00 p.m. ET cutoff | 94.55% | 73% at the end of January 2024 |
| Prime broker affirmation rate | 98.6% | 81% in January |
| Investment manager affirmation, central matching | 97.5% | 92% in January |
| Custodian or manager self-affirmation | 84.29% | 51% in January |
| CNS fail rate | 1.90% | 2.01% May average under T+2 |
| DTC fail rate outside CNS | 2.92% | 3.24% May average under T+2 |
Fail rates on the first T+1 settlement day came in below the T+2 average for May. They settled back to T+2 levels over the summer: the T+1 After Action Report gives July 2024 averages of 2.12% for CNS and 3.31% outside CNS, and calls both "consistent with T+2." Brian Steele, DTCC's president of clearing and securities services, said the industry's work was "driving a smooth transition," and the after-action report described the Command Center as "a key enabler of the smooth transition."
These are market-wide rates. They don't show how any single firm did that week, and a 1.90% market fail rate is compatible with one firm having a very bad night.
A Hypothetical: One Firm's Bad Night
What follows is a hypothetical. The firm, its numbers, and the outage are invented to show how the rules apply; none of it describes a real firm or event.
A mid-sized broker-dealer books 1,200 institutional allocations on a Tuesday. At 6:30 p.m. ET, the feed that sends its confirmations to the central matching service stalls. It recovers at 10:15 p.m. By then the 9:00 p.m. affirmation cutoff has passed, and 400 confirmations are still unaffirmed.
- That night, those 400 trades won't flow into DTC's settlement processing automatically. The delivering party for each one, the firm on client sales and the custodian on client purchases, has to enter a night delivery order by 11:30 p.m. ET or a day delivery order on settlement day. DTCC describes both as "more costly and operationally intensive" than an on-time affirmation, and in this case they arrive in a batch late at night.
- On settlement day, some of the late deliveries don't complete, and the firm ends the day with fails to deliver.
- The next morning, for any fail at a clearing agency that came from a short sale, Regulation SHO Rule 204 requires the firm to close it out by the start of regular trading hours on T+2. Fails from long sales get until T+4. A fail that isn't closed on time puts the security in the penalty box, which blocks short sales without a pre-borrow for the firm and the broker-dealers that clear through it. Regulation SHO Rule 204 Under T+1 covers those rules.
- About a week later, any failed to deliver contract that has been outstanding five business days draws a capital deduction under Rule 15c3-1(c)(2)(ix).
Missing the affirmation on a trade isn't a Rule 15c6-2 violation by itself. The SEC said a firm violates that rule only if it lacks the required agreements or reasonable policies and procedures, or doesn't enforce them. With 400 misses in one night, the firm should expect questions on exactly that. What it needs afterward is evidence that its procedures covered this case. Rule 15c6-2(b)(4) requires procedures for delays in the firm's own confirmations, and (b)(5) requires it to measure and document completion rates, so that day's drop will be in its own records. Rule 15c6-2 in Practice covers what those procedures should include.
What the Hypothetical Firm Should Have on File
- The time the feed failed, the time someone noticed, and who was told.
- The escalation the procedures called for, and evidence that it happened.
- The count of night and day delivery orders entered.
- Each resulting fail, its Rule 204 category, and when it was closed out.
- The affirmation rate for that day next to the firm's normal rate, and what the firm changed afterward.
The go-live went well across the market. For a single firm, an evening outage on trade date could still turn into fails, a penalty box, and a capital charge within a week.
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.