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Statement at Open Meeting Regarding Amendment to Shorten the Trade Settlement Cycle

Acting Chairman Michael S. Piwowar

March 22, 2017

Good morning. This is an open meeting of the U.S. Securities and Exchange Commission on March 22, 2017, under the Government in the Sunshine Act. The Commission today will consider a recommendation from the staff to adopt an amendment to shorten the standard settlement cycle for most securities transactions from three business days after the trade date, T+3, to two business days after the trade date, T+2.

At last, today is Judgment Day for T2. As I mentioned during my remarks at last year’s open Commission meeting to propose moving to a T+2 settlement cycle,[1] rarely is an issue as commonsensical or broadly supported as this one. As many of you know, I have been an enthusiastic supporter of this initiative for quite some time. I am pleased that the Commission is now in a position to consider the adoption and implementation of a T+2 settlement cycle, thus terminating a long and overdue process. It is finally time to say hasta la vista to the antiquated T+3 settlement cycle.

The financial markets have changed significantly since the Commission adopted Rule 15c6-1 in 1993. New products have emerged, trading volumes have grown, and technology has evolved. In addition, the regulatory community and market participants have increased their respective focus on effectively managing credit, market, and liquidity risk. Transition to a T+2 settlement cycle will reduce by one business day the time horizon for risk exposures as well as for potential liquidity pressures, which should yield other benefits for market participants and the clearance and settlement infrastructure as a whole. Market participants’ overall exposure to unsettled trades should decrease, as should any attendant credit, market, and liquidity risk. This, in turn, should improve capital efficiency and enhance the resilience of the national clearance and settlement system.

The recommendation before us sets Sept. 5, 2017 as the compliance date for the implementation of T+2 settlement. Market participants, with the assistance of an industry steering committee, already have been working to prepare the securities industry for a transition to T+2 by that date. The Commission’s action today should help further that goal while also demonstrating how an effective partnership between the public and private sectors can result in stronger and more resilient financial markets. It will be incumbent on each broker-dealer, mutual fund, self-regulatory organization, trading venue, clearing agency, transfer agent, and other affected market participant to do its respective part to ensure a collective readiness for a smooth transition to T+2.

Before I ask Heather Seidel, the Acting Director of the Division of Trading and Markets, to provide additional details about the recommendation, I would like to thank Heather, her deputy director Gary Goldsholle, as well as their counsels Moshe Rothman and Devin Ryan for their leadership on this rulemaking. I also would like to thank Scott Bauguess, Vanessa Countryman, and Hari Phatak for quarterbacking the effort by the Division of Economic and Risk Analysis.

I am also incredibly grateful to the core rulemaking team for all their hard and exceptional work, in particular:

  • Christian Sabella, Jeff Mooney, Justin Pica, Elizabeth Fitzgerald, Susan Petersen, Andrew Shanbrom, and Jesse Capelle from the Division of Trading and Markets.
  • Adam Yonce and Charles Lin from the Division of Economic and Risk Analysis.

Many thanks as well to Sanket Bulsara, Meridith Mitchell, Lori Price, Robert Teply, Cynthia Ginsberg and Leila Bham from the Office of General Counsel.

In addition, I would like to thank many other staff throughout the agency for their contributions, including Jonathan Ingram and Heather Maples from the Division of Corporation Finance; Doug Scheidt, Sarah ten Siethoff, Kathy Joaquin, and Jennifer Palmer from the Division of Investment Management; and Ray Lombardo, Tim Fox, Josephine Tao, Valerie Dahiya, Andrea Orr, and Darren Vieira from the Division of Trading and Markets.

Last, but certainly not least, I would like to express my gratitude to Commissioner Stein, who has been a great partner in bringing this rulemaking to fruition.[2] Your engagement, and that of your counsels, is much appreciated.

Now, I will ask Heather and her team, as well as Scott Bauguess, our Acting Chief Economist and Director of the Division of Economic and Risk Analysis, to provide additional details on the recommendation.

[1] Michael S. Piwowar, “Statement of Commissioner Piwowar at Open Meeting Regarding Proposal to Shorten the Trade Settlement Cycle” (Sept. 28, 2016), available at

[2] Commissioner Michael S. Piwowar and Commissioner Kara M. Stein, “Statement Regarding Proposals to Shorten the Trade Settlement Cycle” (June 29, 2015), available at

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