The T+1 settlement requirements may impact your operations in multiple ways including:
Lapse Processing. Lapse processing, the process that releases shares to the participant once all vesting criteria are met, might need to be reviewed to support a shorter timeframe. Companies might review their standard fair market value (FMV) definition to see if it can help support a shorter timeframe.
Payroll. Payroll interactions should be reviewed to support a shorter timeframe. This can include brokerage data feeds, the types of information provided, the feeds to payroll, and any feedback from payroll back to the company or broker.
Taxes. Tax calculations need to be completed much faster and with less human intervention for timely delivery to the broker where the transaction took place.
Third-party vendors. Third-party tax calculation vendors will need to ensure timely and automated processing.
Shares. Share delivery approvals need to be completed quickly so shares are delivered to the broker no later than T+1.