Wall Street’s Transition to T+1 Slashes Trading Costs for Credit

A long-feared change to Wall Street’s plumbing is paying off — and it’s freeing up billions.

More than a year after the US adopted one-day settlement, a key measure of corporate bond trading costs is down 12%. Margin requirements — the cash or collateral firms must post to cover the risk of failed trades — have dropped 29%, according to Barclays Research. That’s capital that can now be put back to work. Plus, there are signs that those savings have boosted credit market liquidity.

Score one for the US regulator, at least for now. The shift to T+1 was born ...