SEC Warns Firms to Be Prepared for T+1
SEC staff urged broker-dealers and advisers to be ready for the shortening of the securities transaction settlement cycle. (See prior coverage.)
In a Risk Alert, the Division of Examinations ("Division") reminded broker-dealers that on May 28, 2024, the standard settlement cycle for most broker-dealer transactions in U.S. securities will be reduced from two business days after the trade date ("T+2") to one business day after the trade date ("T+1"). The changes were made pursuant to the adoption of amendments to SEA Rule 15c6-1 ("Settlement cycle"). The May 28, 2024, date is also the compliance deadline for new rules related to the processing of institutional trades by broker-dealers and certain clearing agencies, as well as certain recordkeeping amendments applicable to registered investment advisers.
According to the Alert, the Division will conduct examinations and engage in outreach with registrants to review and assess their preparedness for the shortening of the settlement cycle. The Division said it will review any changes "[registrants] have made or plan to make in response to the final rules, such as relating to Registrants’ ACA process and the requirements for straight-through processing, where applicable," as well as on the new recordkeeping and reporting requirements.
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