SEC Guides Investors on "T+2"

The SEC Office of Investor Education and Advocacy published an investor bulletin that explained how the new "T+2" securities settlement cycle will affect certain transactions with brokerage firms.

As reported previously, the standard settlement cycle will be reduced from three business days after the trade date (T+3) to two business days (T+2). The SEC bulletin notes that this will alter the timing for a broker-dealer delivering a security on behalf of an investor, and for payments by an investor who buys a security. Investors are encouraged to consult with their broker-dealers about how the new settlement cycle will affect specific accounts.

Broker-dealers will be required to comply with the new settlement cycle with regard to trades executed on or after September 5, 2017.