On 22 March 2017, the SEC adopted a rule amendment to shorten by one business day the standard settlement cycle for most broker-dealer securities transactions following the trade date. The current settlement cycle of three business days, known as T+3, will thus be shortened to two business days, i.e. T+2. This will bring the US settlement cycle in line with most markets in Europe that have already moved to a T+2 settlement cycle.
Express agreements between parties to a transaction to vary the standard settlement cycle will still be permitted. This change will apply the T+2 settlement cycle to the same transactions currently covered by the T+3 settlement cycle, which includes transactions for stocks, bonds, exchange-traded funds, municipal securities and certain mutual funds.
The amended rule is designed to enhance efficiency, to prevent market and liquidity risk arising from unsettled securities trades, and ensure a coordinated and expeditious transition by market participants to a shortened standard settlement cycle. Compliance with the amended rule by broker-dealers will be required beginning on 5 September 2017. The SEC further stated that T+1 and end-of-day settlement cycles may be considered in the future.
For further detail, see the SEC's press release at:
https://www.sec.gov/news/press-release/2017-68-0
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