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01/01/2017

US - SEC Proposes a Rule Amendment for T+2 Settlement Cycle

On 22 March 2017, the Securities and Exchange Commission (SEC) adopted amended Rule which shortens the standard settlement cycle for most broker-dealer securities transactions by one business day.

On 22 March 2017, the Securities and Exchange Commission (SEC) adopted amended Rule  which shortens the standard settlement cycle for most broker-dealer securities transactions by one business day. At present, the standard settlement cycle for these transactions is three business days (T+3), while the amended rule introduces a shorter settlement cycle of two business days (T+2). The amended rule will enter into force on 5 September 2017. As of this date, broker-dealers will have to comply with the amended rule by not performing a transaction that provides for settlement later than T+2, unless otherwise expressly agreed to by the parties at the time of the transaction. The new rule concerns transactions for stocks, bonds, municipal securities, exchange-traded funds, certain mutual funds, and limited partnerships that trade on an exchange.