What is changing?
Beginning May 28, 2024, the settlement cycle for most securities transactions will move to trade date plus one day (T+1). The transition to T+1 is expected to benefit investors and other market participants with reduced costs, increased market efficiency, and reduced settlement risk in security transactions.
For more information, please see the SEC Reducing Risk in Clearance and Settlement
Key dates
Friday, May 24, 2024, is the Last Trade Date for T+2 settlement Tuesday, May 28, 2024, will be First Trade Date for T+1 settlement Wednesday, May 29, 2024, will be a double settlement date
What products are impacted?
The settlement shortening will impact essentially all products traded by FHN Financial that do not already have a T+1 settlement date, including secondary municipal, agency, mortgage, and corporate securities. New Issue Agency and Municipal Securities will settle as dictated by the underwriter.
For a full list of impacted products, please refer to the DTCC’s T-1-Product-List.pdf (dtcc.com)
What processes are impacted?
The settlement shortening requires an expedited allocation and matching process for Investment Advisors. This means investment advisors and money managers must have allocations communicated to FHN Financial by 6pm CST and affirmations made by 8pm CST. FHN Financial has made specific changes for the allocation and affirmation process for Investment Advisors and Money Managers. Please see the linked resource below for more information.
For depository customers, funds available for trade settlement must be available a day earlier and any pledged bonds must be promptly identified and the pledge released to avoid failed settlements.
How is FHN Financial preparing?
FHN Financial has taken every effort to prepare our operations settlement systems and personnel and educate sales and trading to facilitate a smooth transition to the shortened settlement cycle. This includes making staff available for the later affirmation and allocation times, streamlining the account set-up program, and allotting firm resources to the settlement process.
Resources for customers
FHN Financial Capital Markets, as a division of First Horizon Bank, is a Bank Dealer as defined in Section 3(a) of the Securities and Exchange Act and is regulated by the Federal Reserve and the State of Tennessee Department of Financial Institutions. From a legal and credit standpoint, you are transacting business with the bank. This firms trades agencies, municipals, treasuries, GGL, and agency mortgage securities.
FHN Financial Securities Corp, a wholly owned subsidiary of the Bank, is a broker dealer and a member of FINRA and SIPC. Securities such as corporate bonds, non-agency mortgage securities, and asset backed securities are traded in this firm.
Investment Advisor Instructions
Delivery Instructions - FHN Financial Capital Markets
Delivery Instructions - FHN Financial Securities Corp
SEC.gov | SEC Finalizes Rules to Reduce Risks in Clearance and Settlement
Shortening the Settlement Cycle | DTCC
DTCC FAQs | DTCC
