Comments are due Wednesday (Oct. 11) on a joint agency proposal to shorten the standard settlement cycle for securities purchased or sold by banks.
The proposal, issued Sept. 11 for a 30-day comment period, would shorten the settlement cycle for national banks, federal savings associations, and FDIC-supervised institutions. The Federal Deposit Insurance Corp. (FDIC) and Office of the Comptroller of the Currency (OCC) propose to amend the general requirement that the banks must settle their securities transactions no later than the third business day after the date of the contract by shortening the permissible settlement period from three business days to two.
According to the agencies, the proposal is consistent with an “industry-wide transition to a two-business-day settlement cycle, which is designed to reduce settlement exposure and align settlement practices across all market participants.”
As of Tuesday, no comments had been recorded about the proposal on regulations.gov.