Nasdaq has proposed rule changes to implement the pending reduction in the settlement cycle for U.S. equities, corporate and municipal bonds, and unit investment trusts from the current three business day settlement cycle (T+3) to the proposed two business day settlement cycle (T+2). The current industry target date for the move from a T+3 to T+2 settlement cycle is Sept. 5, 2017.
According to the U.S. T+2 Industry Steering Committee, shortening the settlement cycle for U.S. equity, corporate and municipal bond and unit investment trust trades will reduce operational, systemic and counterparty risk, lower liquidity needs and limit procyclicality, while aligning the U.S. with other T+2 settlement markets across the globe.
Among the proposed rule changes is a modification to Nasdaq Rule 11140(b)(1) to provide that the "ex-dividend date," which is the date on which a security is traded without the right to receive a dividend or distribution that has been declared by the company, generally will be the first business day before the record date, as opposed to the current second business day before the record date.
Nasdaq anticipates filing rule amendments to implement the new T+2 settlement cycle later in 2016. Comments on the proposed rule amendments may be submitted to Nasdaq MarketWatch prior to Sept. 30, 2016.