Market and Product Developments -

Securities Industry Implements T+2 Settlement Cycle -

On September 5, 2017, the securities industry transitioned to a shorter settlement cycle for most broker-dealer securities transactions, pursuant to amendments to Rule 15c6- (a) under the Securities Exchange Act of 1934 adopted by the SEC in March 2017. As noted in a comment letter from the Investment Company Institute, the move from three business days after the trade date (i.e., T+3) to two business days after the trade date (i.e., T+2) for the standard settlement cycle reduces the timing mismatch and funding gap between settlement of a mutual fund’s portfolio security trades and the settlement of transactions in the shares of the mutual fund itself (which generally settle on a T+1 basis), improving cash management for funds to meet redemptions.