FINRA Requests Comments on Proposed Amendments Supporting T+2 Settlement Cycle

FINRA issued Regulatory Notice 16-09 (the "Notice") seeking comment on proposed amendments to rules supporting the standard settlement cycle for securities in the U.S. secondary market from T+3 to T+2. FINRA proposed changes are intended to conform FINRA rules in a manner and timeline that is consistent with Securities and Exchange Commission and other self-regulatory organization efforts to transition to a T+2 settlement cycle. The Notice states that the proposed rule changes will not impose any burdens on the industry in addition to those necessary to implement the industry-wide initiative.

FINRA preliminarily identified the following rules that establish or reference a T+3 settlement cycle that would need to be amended to reflect a T+2 settlement cycle:

• NASD Rule 2830 (Investment Company Securities);

• FINRA Rule 11140 (Transactions in Securities "Ex-Dividend," "Ex-Rights" or "Ex-Warrants");

• FINRA Rule 11150 (Transactions in "Ex-Interest" in Bonds Which are Dealt in "Flat");

• FINRA Rule 11210 (Sent by Each Party);

• FINRA Rule 11320 (Dates of Delivery);

• FINRA Rule 11620 (Computation of Interest); and

• FINRA Rule 11860 (COD Orders).

Comments on the proposed rule amendments are due by April 4, 2016.