NEW YORK, May 29 (Reuters) - The Securities Industry and

Financial Markets Association (Sifma) said on Wednesday it is

pleased with the transition to faster trade settlement, adding

it continues to monitor progress.

On Tuesday, U.S. trading of equities, corporate and

municipal bonds and other securities moved to a one-day

securities settlement cycle (T+1) from two days (T+2), to comply

with a rule change adopted last February by the U.S. Securities

and Exchange Commission.

Settlement is the process of transferring securities or

funds from one party to another after a trade has been agreed.

The shift in the world's largest financial market is aimed

at making market infrastructure more resilient, but it has put

investors and regulators on alert for increased trade failures

and other hiccups.

Wall Street is undergoing its first big test on Wednesday,

when trades executed last Friday, when T+2 was still in place,

and trades from Tuesday, the first day of T+1, will be settled.

This is expected to lead to a rise in volume.

Market participants expect to see an increase in trade

failure as the industry adjusts to the faster settlement cycle.

Research firm ValueExchange said on average market participants

expect the fail rate to increase to 4.1% after T+1

implementation, from 2.9%.