SEC Approves T+2 Settlement

April 18, 2017

The U.S. Securities and Exchange Commission (SEC) on March 22, 2017 adopted amendments to Rule 15c6- 1(a) under the Securities Exchange Act of 1934 (Exchange Act), to shorten the standard settlement cycle for securities transactions by broker-dealers from three business days after the trade date (T+3) to two business days following the trade date (T+2).1 The amendments are a response to changes in markets, technology, operations and infrastructure since the T+3 requirement was put in place in 1993. The amendments are intended both to reduce credit, market and liquidity risk (thereby reducing systemic risks) and to encourage technological development (to further reduce settlement times in the future). The amendments become effective May 30, 2017, with a compliance date for broker-dealers of September 5, 2017.

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The article was republished by The Hedge Fund Journal in the April/May 2017 issue.