MSRB Sets Sept. 5 Effective Date for Move to T+2 Settlement Cycle

WASHINGTON – The Municipal Securities Rulemaking Board has announced that its rule changes to facilitate a move to a two- instead of three-day settlement cycle for municipal securities will be effective on Sept. 5.

The MSRB had previously said it would announce an effective date that would align with the transition being undertaken in the rest of the markets. The Securities and Exchange Commission adopted amendments to its Rule 15c6-1(a) on March 22 that would shorten the standard settlement cycle for most broker-dealer transactions to two days from three. It also established a compliance date of Sept. 5.

The MSRB's amendments modify its Rule G-12 on uniform practice and Rule G-15 on confirmation, clearance, settlement, and other requirements. The amendments received generally positive feedback from industry groups during the approval process and SEC commissioners Michael Piwowar and Kara Stein applauded the idea of an industry shift.

The Securities Industry and Financial Markets Association had said the changes could affect MSRB Rule G-32 on disclosures in connection with primary offerings and suggested that the MSRB use the T+2 transition timing to revise customer disclosure requirements under the rule. The MSRB said it may consider suggested clarifications to the rule at a later date.

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Law and regulation
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