SEC Requires T+1 Settlement Cycle

On February 15, 2023, the SECadopted amendmentsto Exchange Act Rule 15c6-1 to shorten the settlement cycle of most securities transactions to within one business day of the trade date (T+1). The rulemaking also adds new Exchange Act Rule 15c6-2 with requirements for broker-dealers and registered investment advisers to improve the rate of same-day allocation, confirmation, and affirmation of institutional trades. Additionally, new Exchange Act Rule 17Ad-27 imposes requirements applicable to clearing agencies that are central matching service providers (CMSPs) to facilitate straight-through processing. Finally, the current T+4 settlement cycle in Rule 15c6-1(c) for firm commitment offerings priced after 4:30 pm ET will move to T+2.