Comment Deadline Set for FINRA Proposal to Shorten Syndicate Account Settlement Times

Comments on proposed amendments to FINRA Rule 11880 ("Settlement of Syndicate Accounts") to shorten the permitted syndicate account settlement timeframe for corporate debt offerings are due by September 8, 2022. The Notice was published in the Federal Register.

As previously covered, the proposal would implement a two-phased approach to settlement that would require syndicate managers to remit at least 70 percent of the gross amount due within the first 30 days of settlement, with any remaining balance paid within 90 days of settlement. The proposal strictly applies to corporate debt offerings, and FINRA is not considering shortening the settlement timeframe for public offerings of equity securities at this time. The proposed amendments would also harmonize FINRA rules regarding syndicate account settlement with current MSRB rules, which were amended in 2009. The anticipated effective date for the amendments is January 1, 2023.