On March 22, 2017, as previously anticipated by the market, the SEC adopted an amendment to Rule 15c6-1 under the Securities Exchange Act of 1934 to shorten the standard settlement cycle for most broker-dealer transactions from three business days after the trade date (T+3) to two business days (T+2). The SEC proposed the amendment on September 28, 2016, in connection with a variety of related changes to the SEC's rules and the rules of self-regulatory organizations such as FINRA to facilitate the U.S.'s move to a T+2 settlement cycle.
According to the SEC, Rule 15c6-1, as amended, is designed to enhance efficiency, reduce risk, and ensure a coordinated and expeditious transition by market participants to the shortened standard settlement cycle.
Broker-dealers will be required to comply with the rule beginning on September 5, 2017, and to assist them (and other securities professionals and the investing public) in their preparation for the implementation, the SEC has established an e-mail address (T2settlement@sec.gov) for the submission of inquiries to the SEC staff.
For further information on this topic please contact Matthew Kutner at Morrison & Foerster LLP by telephone (+1 212 468 8000) or email (firstname.lastname@example.org). The Morrison & Foerster LLP website can be accessed at www.mofo.com.
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