SEC Approves MSRB Amendments to Facilitate T+1 Settlement

The SEC approved an amendment to MSRB Rule G-12 ("Uniform Practice") to require the completion of allocations, confirmations, and affirmations by the end of trade date for municipal securities transactions.

In its Notice, the MSRB stated that the amendment to Rule G-12, which establishes new section (k) of the rule, is designed to facilitate the move to a settlement cycle for municipal securities transactions of one business day and aligns with the same-day process for equities and corporate bonds required by the new Exchange Act Rule 15c6-2 ("Same-day allocation, confirmation, and affirmation"). The Rule provides two options by which dealers may comply to meet the standard, either by: (i) entering into a written agreement or (ii) establishing written policies and procedures. Both options are required to be reasonably designed to ensure completion of the allocation, confirmation and affirmation for the transaction as soon as technologically practicable and no later than the end of the day on trade date.

The compliance date for new Rule G-12(k) is May 28, 2024, which is the same as the effective date for Exchange Act Rule 15c6-2 and the transition to T+1 settlement.

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