The U.S. Securities Industry Association says the industry should continue pursuing straight-through-processing and not the interim step of shortening the settlement cycle.

In its response to the Securities and Exchange Commission’s concept release on securities transaction settlement, the SIA said that by achieving the goal of STP, it believes that investors and the industry will receive the benefits of risk reduction, streamlined and efficient processing, improved functionality and service, greater capacity, and cost efficiencies.

Jeffrey Bernstein, chairman of SIA’s STP steering committee and senior managing director, Bear Stearns and Co., said the industry should continue to focus its efforts in this area on achieving STP, and that shortening the settlement cycle should not be considered at this time. The task force responsible for drafting the response urged the commission to work with the industry to facilitate STP and achieve the goals of same-day affirmation/matching, elimination of physical certificates, and other STP milestones.

SIA also called on the SEC to encourage issuers to use the Direct Registration System and to support other industry initiatives to eliminate physical certificates. It said the SEC should also support efforts to educate sales professionals and investors about the benefits of STP.

In March, SIA’s board of directors endorsed in March a continuation of the association’s STP projects, and the establishment of an executive team to plan and prioritize industrywide technical and operations projects through 2010.