Wall Street clearing firm proposes 1-day trade settlement after Robinhood controversy

The firm that provides clearing and settlement services for brokers proposed shortening the time it takes to settle a trade, amid the GameStop controversy that caused brokerages like Robinhood to restrict trading.

The Depository Trust & Clearing Corporation, or DTCC, outlined what a T+1, or one-day settlement period, would look like for the trading industry, proposing a two-year plan to shorten the settlement cycle.

Currently, it takes two business days to settle a trade — that is, to complete a transfer of securities and cash between parties.

“The time to settlement equals counterparty risk, which can become elevated during market shocks. It can…