Regulatory Notice 17-19

SEC Approves Amendments to FINRA Rules to Conform to the Shortened Standard Settlement Cycle for Most Broker-Dealer Transactions From Three Business Days (T+3) to Two Business Days After the Trade Date (T+2)

Effective Date: September 5, 2017

Summary

On February 9, 2017, the Securities and Exchange Commission (SEC) approved amendments to FINRA rules to conform to the SEC’s amendment to Rule 15c6-1(a) under the Securities Exchange Act of 1934 (SEA) 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 after the trade date (T+2) and the industry-led initiative to shorten the settlement cycle from T+3 to T+2. The amendments revise settlement-related provisions in the following FINRA rules:

  • Rule 2341 (Investment Company Securities);
  • Rule 11140 (Transactions in Securities ‘‘Ex-Dividend,’’ ‘‘Ex-Rights’’ or ‘‘Ex-Warrants’’);
  • Rule 11150 (Transactions ‘‘Ex-Interest’’ in Bonds Which Are Dealt in ‘‘Flat’’);
  • Rule 11210 (Sent by Each Party);
  • Rule 11320 (Dates of Delivery);
  • Rule 11620 (Computation of Interest);
  • Rule 11810 (Buy-In Procedures and Requirements); and
  • Rule 11860 (COD Orders).

The amendments to these rules become effective on September 5, 2017.

The rule text is available in Attachment A.

Questions concerning this Notice should be directed to:

  • Kosha Dalal, Associate Vice President and Associate General Counsel, Office of General Counsel (OGC), at (202) 728-6903; or
  • Sarah Kwak, Counsel, OGC, at (202) 728-8471.