On Mar. 8, DTC proposed rule change to shorten settlement to T+1.
Proposed rule change would amend the DTC corporate actions distributions service guide and DTC settlement service guide to make technical revisions to the guides.
In anticipation of US market transition to shortened standard settlement cycle from the current 2 business day after trade date (T+2) to 1 business day after trade date (T+1)
Follows SEC final rules to shorten settlement cycle, effective May 28, 2024, #128801.
Further, DTC published Important notice 19833-24 to inform of new proposed rule.
Proposed Amendments
Modifies distributions guide relating to the DTC interim accounting process and impact of the shortened settlement cycle on the timing of the allocation of stock distributions.
Modifies settlement guide re settlement processing timeframes to accommodate T+1.
Effective May 28, 2024/such later date as may be announced by SEC for compliance.
Redline version of proposed rule amendments included as Exhibit 5 of filing on pg. 34.
Consultation
Comments should be submitted within 21 days of publication in the federal register.
Mar. 20, 2024 DTC Re-Filed Proposal
On Mar. 20, 2024, DTC refiled proposal to amend guides to make technical revisions.
Comments must be submitted in 21 days from pending publication in federal register.
Mar. 22, 2024 SEC Approval
On Mar. 22, 2024, SEC published notice approving DTC proposal, for immediate effect.
Mar. 2024 Fed Reg Approval
On Mar. 28, 2024, SEC published approval of DTC proposal in the federal register.
Apr. 2024 DTC Mandatory Corporate Action Events
On Apr. 26, 2024, DTC Asset Services group issued Important notice B# 20084-24.
Entitled T+1 impact: notification requirements of mandatory corporate action events.
Critical that agents provide timely notification to DTC of announcements and rates.
When entitlement stemming from corporate action is new security, notice to DTC should include completed eligibility questionnaire to make the new security eligible.
Also, agents were reminded for mandatory events to send DTC a notice no fewer than five business days prior to the effective date or payable date of such transaction.
Regulators
DTC
Entity Types
B/D; Depo; Exch
Reference
Nt B# 20084-24, 4/26/2024; 89 FR 21557, 3/28/2024; SEC RF 34-99843, 3/22/2024; RF, 3/20/2024; Nt 19833-24, RF SR-DTC-2024-002, 3/8/2024;
