OCC issues guidance on shorter securities settlement cycle

The OCC said banks should prepare for a change in the standard securities settlement cycle for most U.S. securities transactions, effective May 28.

Details: The OCC’s bulletin says:

  • Securities and Exchange Commission rules shorten the standard settlement cycle for most broker-dealer transactions from the second business day after the trade date (T+2) to the first business day after the trade date (T+1).

  • Banks should prepare to meet the applicable time frames for the T+1 settlement cycle for trades related to their securities activities.

  • Banks that offer retail non-deposit investment products through broker-dealers should assess their preparedness for the new settlement time frames.