On March 22, 2017, as previously anticipated by the market, the SEC adopted an amendment to Rule 15c6-1 under the Securities Exchange Act of 1934 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).  The SEC proposed the amendment on September 28, 2016, in connection with a variety of related changes to the SEC’s rules and the rules of self-regulatory organizations such as FINRA to facilitate the U.S.’s move to a T+2 settlement cycle.

According to the SEC, Rule 15c6-1, as amended, is designed to enhance efficiency, reduce risk, and ensure a coordinated and expeditious transition by market participants to the shortened standard settlement cycle.

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Additional contributor to this post:

Matthew J. Kutner, mkutner@mofo.com

FINRA’s March 2017 announcement of its engagement initiative provides an opportunity for the industry to consider FINRA’s activities on a much broader level.

FINRA’s special notice reflects its previously announced plans to examine its rules and procedures based on its interaction with the industry.  For example, in his cover letter to FINRA’s 2017 examination priorities letter, Robert Cook, FINRA’s President and CEO, discussed his “never ending” listening tour of the industry.

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Additional contributor to this post:

Lloyd S. Harmetz, lharmetz@mofo.com