Posted on Wednesday, February 15, 2023

The Securities and Exchange Commission (SEC) published notification that they have posted their final rule, Shortening the Securities Transaction Settlement Cycle, to the Federal Register (official publication date is 3/6/2023). This rule is effective 60 days after the official publication date. It adopts rule amendments to shorten the standard settlement cycle for most broker-dealer transactions from two business days after the trade date to one, to adopt new rules related to the processing of institutional trades, and to amend certain recordkeeping requirements applicable to registered investment advisers.

The rule requires Central Matching Service Providers (CMSP) to establish, implement, maintain and enforce policies and procedures to facilitate straight-through-processing (STP) and to file an annual report regarding progress made with STP. The Commission also requires the CMSP to tag information in the annual report in Inline XBRL. The final rule names a compliance date of May 28, 2024.

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