SEC Proposes Shortening Settlement Cycle to T+2

On September 28, 2016, the SEC proposed an amendment to Rule 15c6-1(a) which would shorten the standard settlement cycle in the United States for most securities transactions from three business days after the trade date (T+3) to two business days (T+2).

In the proposing release, the SEC explained that the rule change is designed to benefit all market participants by reducing liquidity, market, credit and systemic risk. The proposed amendment reflects a change the U.S. securities industry has advocated for some time and follows considerable effort by the industry to identify the operational and regulatory changes required for a transition to T+2.