ASA Urges SEC to Shorten Settlement Cycle

WASHINGTON – The American Securities Association (ASA) submitted comments to the Securities and Exchange Commission (SEC) on its recent proposal to shorten the standard settlement cycle for securities transactions from the current two days after trade (T+2) to one day after trade (T+1).

“While the ASA generally supports the Proposal and the shift to T+1, we reiterate our concerns regarding the inadequate comment periods being provided by the SEC on recent proposals, and the need for the SEC to conduct a holistic examination of the impact that all outstanding rule proposals will have on the markets and the broader economy,” ASA CEO Chris Iacovella wrote in the letter.

In the letter, ASA outlined the following additional recommendations to improve the proposal:

• The initial compliance date for T+1 should be the first day after a holiday weekend.

• The SEC should adopt a more principles-based approach towards proposed Rule 15c6-2.

• The use of automated standing settlement instructions should be encouraged.

• E-delivery should be the default option for delivery of prospectuses and confirmations.

• The SEC should continue to study a potential future transition to T+0 and whether the costs and risks associated with T+0 outweigh its benefits.

• The SEC and Financial Industry Regulatory Authority (FINRA) should work closely with industry to ensure investors are adequately educated and informed about the transition to T+1.

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ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.