Joint Release/Agencies Issue Notice of Proposed Rulemaking to Shorten Settlement Cycle — 2017-09-01

Agencies Issue Notice of Proposed Rulemaking to Shorten Settlement Cycle The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) today issued a notice of proposed rulemaking to shorten the standard settlement cycle for securities purchased or sold by national banks, federal savings associations, and FDIC-supervised institutions. The three-day settlement cycle, which is the current standard for the securities industry in the United States, is known as "T+3"—shorthand for "trade date plus three days." The OCC and FDIC are issuing the proposal in connection with an industry-wide shift to a T+2 settlement cycle. The new T+2 cycle is the culmination of a multi-year securities industry initiative and rule changes being implemented by other financial regulators and securities self-regulatory organizations. The change applies to trades placed on or after September 5, 2017. A shorter settlement cycle will directly reduce banks' counterparty settlement risk and reduce systemic risk.