Our Best Advice for T+1 and Beyond

Settlement cycles have been shortening for years, but the changes required for T+1 have accelerated settlement cycles to another level.

The United States transitioned to T+1 settlement for equities, corporate debt, and unit investment trusts on May 28, 2024, under Rule 15c6-1. The goal is to create more efficient markets through reduced settlement risk and lower liquidity requirements.

What Is T+1?

T+1 settlement means a trade is fully completed — shares delivered and funds transferred — one business day after the trade date. “T+1” simply means trade date plus one day.

How T+1 Impacts Equity Operations

Processing Time

Shorter windows require faster approval and release of shares once vesting criteria are met. Companies may need to revisit fair market value timing and internal workflows.

Tax Calculations

Tax calculations must be completed faster to ensure the timely delivery of data to brokers.

Payroll

Payroll teams need tighter coordination with brokerage feeds and internal systems to meet the reduced timeline.

Approvals

Share delivery and internal approvals must happen more quickly.

Vendor Coordination

All third-party partners — brokers, payroll providers, administrators — must align on timing to prevent delays.

Our Best T+1 Advice

Coordinating compensation is a critical part of managing talent, ensuring fairness, and supporting competitiveness. Strategic alignment across teams helps attract and retain talent while maintaining accuracy and compliance.

Here are our top recommendations:

1. Look at the Holistic Picture

Equity administration is interconnected. Stock plan processes, communication, system inputs, and oversight should be evaluated together — not as isolated tasks. This improves implementation, communication, and long-term maintenance.

2. Identify Gaps in the Process

Gaps vary by company, but common issues include unclear communication, outdated data, workflow bottlenecks, weak quality control, and unaddressed risk points. Audit processes, gather feedback, and review metrics to find where refinement is needed.

3. Foster Strong Partner Relationships

Set recurring touchpoints with everyone involved — outsourced admin, total rewards, payroll, treasury, and legal. A consistent feedback loop strengthens alignment and improves future decision-making.

4. Prepare for What’s Next

T+1 is one step in a longer evolution. As technology moves toward instant transactions, older tools and workflows will fall behind. Equity programs must adapt to faster processing and increased expectations.

5. Leverage Your Outsourcing Partner

Organizations that outsource equity administration are often ahead of the curve. A dedicated provider handles non-core functions so internal teams can focus on strategy, supported by expert guidance as the landscape evolves.

At Stock & Option Solutions, we support interim placements, long-term consultants, and full outsourcing to help teams navigate immediate needs and build sustainable equity departments.

Contact us for a no-obligation consultation to see whether outsourced equity administration is right for you.