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Firm Memoranda

One-Day Settlement Cycle (T+1) To Begin May 28, 2024

Date: 04/29/24

As previously noted, in February 2023, the Securities and Exchange Commission adopted amendments to Rule 15c6-1 under the Securities Exchange Act of 1934 to shorten the standard settlement cycle for most brokerdealer transactions from two business days after the trade date (“T+2”) to one business day after the trade date (“T+1”). Note that for firm commitment underwritten offerings that price after 4:30 pm (Eastern Time), the settlement cycle will be T+2. Please see our previous memorandum entitled “SEC Adopts Final Rules Regarding On-Day Settlement Cycle (T+1),” which can be found here, for a summary of the adopted amendments.

T+1 settlements will be required beginning on May 28, 2024 (the Tuesday after Memorial Day). Trades subject to the standard settlement cycle made on Friday, May 24, 2024 and on Tuesday, May 28, 2024 will settle on Wednesday, May 29, 2024.

As noted in our previous memorandum, the new rules do not repeal or otherwise alter the “override provision” that allows parties in firm commitment underwritten offerings to expressly agree to a settlement cycle longer than T+1. Industry participants believe that most fixed income offerings (other than equity-linked securities) are likely to continue with the current market practice of contracting for a longer settlement cycle, while most equity offerings are likely to move to the T+1 cycle without contracting for a longer period.

CGR Memo - One-Day Settlement Cycle (T+1) To Begin May 28, 2024.pdf (pdf | 184.63 KB )