ASA Welcomes SEC’s Proposal to Shorten Settlement Cycle to T+1

WASHINGTON, D.C. – Today, the American Securities Association (ASA) released a statement regarding the U.S. Securities and Exchange Commission (SEC) approving a rule to shorten the standard settlement cycle for most broker-dealer transactions from two business days after the trade date (T+2) to one business day after the trade date (T+1).

Last year, ASA submitted comments to the SEC regarding concerns and outlined recommendations to improve the proposal.

“ASA appreciates the SEC adopting many of our recommendations and welcomes the transition to reduce the settlement time to T+1, but we caution the SEC to wait and see how the market reacts to these changes before moving beyond that timeline,” ASA CEO Chris Iacovella said. “Appropriate settlement delays provide brokers with a clear picture of their and their client’s capital position and that makes equity markets less vulnerable. Any consideration of moving to a T+0 regime needs to be well thought out, stress tested, and fully considered prior to moving to the proposal phase.”

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