FDIC and OCC Finalize Rule to Shorten Settlement Cycle for Securities

The rule requires banks to settle most securities transactions within the number of business days in the standard settlement cycle followed by registered broker dealers in the U.S., unless otherwise agreed to by the parties at the time of the transaction. Banks will be able to determine the number of business days in the standard settlement cycle followed by registered broker dealers by referencing SEC Rule 15c6-1, 17 CFR 240.15c6-1(a).

On September 05, 2017, the securities industry in the U.S. transitioned from a standard securities settlement cycle of three business days after the date of the contract, commonly known as T+3, to a two-business-day standard, or T+2. On September 11, 2017, the agencies proposed amending regulations applicable to OCC-supervised institutions and FDIC-supervised institutions by aligning those regulations with a T+2.

Related Links

• Financial Institution Letter
• Final Rule (PDF)

Effective Date: First calendar quarter date following 30 days from FR publication

Keywords: Americas, US, Securities, Banking, Settlement Cycle, T+2, US Agencies