SAN DIEGO, Calif. - With T+1 looming in 2002 and extended trading hours soon to become a reality, mutual fund companies must achieve straight-through-processing within the next two years, mutual fund executives said at the Investment Company Institute's tax and accounting conference here last week.
T+1 refers to the Securities and Exchange Commission's requirement that all trades be cleared and settled within one day of execution as of 2002. The SEC currently requires investment firms to clear and settle trades in T+3, or trade plus three days. Straight-through-processing refers to automated clearance and settlement of trades without paperwork or human intervention. Many mutual fund companies still rely on faxes, telephones and keypunch operators to type in, allocate and settle trades, the executives said.