Effective September 5, 2017, the standard settlement cycle for most securities transactions will be shortened to two business days after the trade date (T + 2). This change from the current T+ 3 settlement under SEC Rule 15c6-1(a), impacts most broker-dealer securities transactions, including municipal bonds.
Industry Impact
The shortened settlement cycle helps reduce the risk of market changes that affect trade prices, and lessens liquidity and capital pressures on firms and clearing agencies. This change also harmonizes U.S. settlement terms with the T+2 cycle already in place in most European and Asian markets.
The SEC is promoting further improvements to the settlement cycle and is studying a move to T+1. The results of the study and further recommendations are expected within 3 years.
Effect on Licensing Exams
This rule change will impact all FINRA and MSRB licensing exams administered after September 5, 2017.
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Written by Marcia Larson
Marcia Larson is Vice President, Faculty, at Knopman Marks Financial Training, New York, NY. She has extensive experience in financial licensing and regulatory training, having authored, developed and presented courseware for numerous securities and insurance exam preparation and continuing education and compliance programs. Before joining Knopman Marks, Marcia was Director of Annuity Products and Business Development at CUNA Mutual Group, where she developed and marketed industry-leading annuity products and retirement solutions and implemented distribution relationships. She was previously VP, Securities Products for Kaplan Financial, managing securities training products and subsequently, international training and businesses development. Marcia has trained thousands of financial industry exam candidates throughout their careers, and also college students as an adjunct professor. Marcia was a summa cum laude graduate of Wartburg College with degrees in Business Administration and Piano Performance. Marcia also holds the designations of Chartered Financial Consultant® (ChFC®), Chartered Life Underwriter (CLU®), Certified Employee Benefit Specialist (CEBS), and Fellow Life Management Institute™ (FLMI®). She currently teaches the SIE, Series 6, 7, 24, 50, 52, 63, 65, and 66 exams.
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