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SEC adopts T+2 settlement cycle for securities transactions

Joe Mont | March 24, 2017

The Securities and Exchange Commission this week shortened, by one business day, the standard settlement cycle for most broker-dealer securities transactions. 

Currently, the standard settlement cycle for these transactions is three business days, known as T+3.  The amended rule shortens the settlement cycle to two business days, T+2.

The amended rule is designed “to enhance efficiency, reduce risk, and ensure a coordinated and expeditious transition by market participants to a shortened standard settlement cycle,” an SEC statement says.

Broker-dealers will be required to comply with the amended rule beginning on Sept. 5, 2017.

The amended Rule 15c6-1(a) would prohibit a broker-dealer from effecting or entering into a contract for the purchase or sale of a security that provides for payment of funds and delivery of securities later than T+2, unless otherwise expressly agreed to by the...

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