ISDA Publishes The 2017 OTC Equity Derivatives T+2 Settlement Cycle Protocol

Introduction

On July 28, 2017, ISDA published the ISDA 2017 OTC Equity Derivatives T+2 Settlement Cycle Protocol (Protocol) which will enable participants to adjust the settlement cycle of certain of their OTC equity derivatives transactions from three business days to two business days, in accordance with upcoming regulatory changes in the United States, Canada, Mexico and Peru. Adherence to the Protocol is now open and is not limited in time. ¹
 
Upcoming T+2 Settlement Cycle and Existing OTC Equity Derivatives Documentation
 
On Sept. 5, 2017, the standard settlement cycle for most securities transactions in shares that trade in the United States, Canada, Mexico and Peru (each a Covered Region) is moving from a three business day ² settlement cycle (T+3) to a two business day settlement cycle (T+2). Currently, most OTC equity derivatives agreements refer to Payment Dates and/or Settlement Dates as three business days following the date the underlying asset