Securities Transaction Settlement Cycle Amendment

On May 28, 2024, the standard settlement cycle for most broker-dealer transactions in the U.S. shortens from two (2) business days after the trade date to one business day after the trade date (“T+1”). 

Broker-dealers should note that shortening the standard settlement cycle may impact on compliance with other existing regulatory obligations, including reducing the timeframes to effect the closeout of most types of fail-to-deliver positions under Rule 204 of Regulation SHO.

Additionally, shortening the standard settlement cycle to T+1 also shortens the timeframe for broker-dealers to comply with the requirements under Exchange Act Rule 10b-10 to give or send a written confirmation at or before completion of the transaction.

There are also compliance considerations related to these rule changes, which broker-dealers and market participants should consider.

Review the SEC Division of Examination’s Risk Alert here for more information:

https://www.sec.gov/files/risk-alert-tplus1-032724.pdf

Final Rule here:

https://www.sec.gov/files/rules/final/2023/34-96930.pdf