MRSB seeks comment on proposal to shorten transaction settlement cycle

By Tali Rackner

Norfolk, Va., Nov. 10 – The Municipal Securities Rulemaking Board is seeking public comment on a proposal to shorten the settlement cycle for transactions in municipal securities in response to a securities industry-led initiative to shift the current settlement cycle for all fixed-income and equity securities to trade date plus two days (T+2) from trade date plus three days (T+3), according to a press release.

Changes to Rules G-12, on uniform practice, and G-15, on confirmation, clearance, settlement, would enable the first shortening of the settlement cycle since 1995.

The T+2 settlement cycle, if adopted by all relevant regulators, would apply across the securities industry, including equity securities and corporate bonds in addition to municipal securities.

“The MSRB is supportive of transitioning to a shorter settlement cycle as a means of both reducing risk and saving costs,” executive director Lynnette Kelly said in the release. “To ensure we can address any areas in MSRB rules that would present challenges to a shortened settlement cycle, we encourage municipal market participants to provide input on this potential change.”

Comments should be submitted to the MSRB no later than Dec. 10.

The MSRB is an Alexandria, Va.-based organization whose mission is to protect investors, municipal entities and the public interest by promoting a fair and efficient municipal market, regulating firms that engage in municipal securities and advisory activities, and promoting market transparency.

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