Following its receipt of comments, on December 14, 2016, FINRA filed proposed amendments to its rules to conform them to the SEC’s proposed amendments to Rule 15c6-1(a) 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 (T+2).
As we mentioned in a previous post, the movement from T+3 to T+2 is generally viewed with welcoming acceptance industry-wide. According to the release, “FINRA believes that the proposed rule change supports the industry-led initiative to shorten the settlement cycle to two business days,” and will provide the regulatory certainty to facilitate movement toward a T+2 settlement cycle.
The affected FINRA rules potentially include Rules: 2341 (Investment Company Securities); 11140 (Transactions in Securities “Ex-Dividend,” “Ex-Rights” or “Ex-Warrants”); 11150 (Transactions “Ex-Interest” in Bonds Which Are Dealt in “Flat”); 11210 (Sent by Each Party); 11320 (Dates of Delivery); 11620 (Computation of Interest); 11810 (Buy-In Procedures and Requirements); and 11860 (COD Orders).
If the proposed amendments are approved by the SEC, FINRA will announce the effective date in a Regulatory Notice, which date would correspond with the SEC’s proposed amendment to Rule 15c6-1(a).