12 September 2017
Washington DC
Reporter: Stephanie Palmer

SEC praises “smooth” T+2 transition


The US Securities and Exchange Commission (SEC) has praised the industry’s efforts in moving to a T+2 settlement cycle from T+3, after the transition went ahead on 5 September, with chair Jay Clayton saying the move “represents a significant accomplishment”.

A statement from the SEC noted that the change to T+2 was the result of extensive preparation and coordination among industry players and regulators.

The move is intended to reduce risk in the clearing and settlement process for central counterparties and their members, and for other market participants, while also improving efficiency and promoting innovation and change in market infrastructures and operations

Affected securities include equities and corporate and municipal bonds, and unit investment trust (UIT) trades in the US, Canada and Mexico. The shorter settlement timeframe also aligns these markets with the EU.

Clayton said: “Going forward, investors and other market participants will be able to receive the proceeds of their securities transactions one day sooner, thereby enhancing the overall efficiency of the US securities markets.”

He added: “I would like to thank my colleagues, including [SEC] commissioners Michael Piwowar and Kara Stein and the staff of the commission, for their leadership in achieving this important result.”

Piwowar commented: “I applaud the commission staff and market participants for achieving a smooth transition to a new environment that provides greater efficiency and less risk to the American people.”

Stein added: “The shortened settlement cycle benefits investors and contributes to the resiliency of our securities markets.”

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