On Feb. 26, FINRA adopted changes conforming to T+1 settlement.
FINRA has adopted amendments to conform its rules to shorten standard settlement cycle for most broker-dealer transactions to one business day after trade date (T+1).
Follows Nov. 2023 technical notice, FINRA and SEC proposals, #128801 and #192757.
Also to FINRA Rule 11894 on review by the Uniform practice code (UPC) committee.
Effectiveness
The amendments to these rules will become operative on or after May 28, 2024.
Recommendations for Firms
FINRA recommends that firms particularly consider impact on settlement of American depositary receipts and exchange-traded funds with underlying foreign securities.
Also, shortened timeframe for ensuring timely settlement of end of day transactions.
FINRA further reminds firms that new Rule 15c6-2(a) imposes obligations on any B/D engaging in the allocation, confirmation or affirmation process with another party.
Must either enter into written agreements with relevant parties to ensure completion of allocations as soon as technologically practicable by the end of the day on trade date.
Or establish, maintain, enforce written policies and procedures to ensure completion.
Firms should discuss the obligation with vendors / clearing firms with which they work.
Also, communicate with buy-side clients as to trade allocation, matching information.
