On August 22, 2017, the New York Stock Exchange (the “NYSE”) distributed a notification announcing changes to its policy relating to ex-dividend trading in reaction to the Securities and Exchange Commission’s (the “SEC”) amendments to Rule 15c6-1(a) of the Securities Exchange Act of 1934, as amended, that will shorten the settlement cycle for securities trades from T+3 to T+2. Under the NYSE’s current policy, ex-dividend trading commences two trading days prior to the record date established for a declared dividend. Under the NYSE’s revised policy, which will go into effect upon the implementation of the new T+2 settlement cycle on September 5, 2017, ex-dividend trading will commence one trading day prior to the record date established for a declared dividend. The NYSE noted that no securities will begin ex-dividend trading on September 5, 2017, and provided the following guidance for the period of transition to the new policy, keeping in mind the Labor Day holiday on September 4, 2017:

  • Securities with a dividend record date of September 5, 2017 will begin ex-dividend trading on August 31, 2017
  • Securities with a dividend record date of September 6, 2017 will begin ex-dividend trading on September 1, 2017
  • Securities with a dividend record date of September 7, 2017 will begin ex-dividend trading on September 6, 2017  
  • Securities with a dividend record date of September 8, 2017 will begin ex-dividend trading on September 7, 2017

The NYSE’s policy change mirrors the policy change that was announced in relation to Nasdaq-listed securities on June 19, 2017.

For more information on the shortened settlement cycle from T+3 to T+2, please see our previous memorandum, available here