Subject: File No. s7-22-16
From: Gene Finn, PhD
Affiliation: Retired Chief economist SEC (1969-1976) NASD/NASDAQ (1983-1995)

December 21, 2016

In numerous e-mail comments to the Chairperson and to the Div of trading and markets I have argued that cash account customers' transactions handled as principal by the executing broker should be settled on a next day (T+1) basis. It is common for execution, clearance, settlement and custody to be provided by a single or interrelated entities.

When this occurs, all aspects of the trade have occurred the instant that execution has been recorded on the customer account

These are effectively COD (cash on delivery) transactions and require only the sweep of funds to/from an individual's sweep account for their settlement. The external mutual fund or bank sweep account provides protection for the individual from risks not covered by SIPC in event of a failure.

With continuous net settlement clearing, individual customer principal trades with the executing broker do not involve ancient "broker to broker" individual stock balance settlement. Indeed the broker (marketmaker) balance with NSCC/DTC is probably continuous as trades confirm throughout the trading day.

Securities firm failures can happen and the unnecessary risk of individual customer funds and securities being kept in brokerage accounts for an extra 2-4 days (weekends included) is a real cost to customers.

Indeed, the Commission should consider to shifting individual customers to Cash on Delivery basis similar to institutional customers.

Funds available for trading by individual accounts is adjusted instantly following a trade. However when an outside sweep account is used the sweep account may adjust only at day's end. Same day settlement of principal trades may indeed be possible.

Respectfully yours,

Gene Finn