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Investing May 24, 2002
SEC Proposes T+1 Move
May 24, 2002 (PLANSPONSOR.com) - The Securities and
Exchange Commission (SEC) proposes requiring US securities
transactions to move to a T+1 settlement environment, and has
asked for public comment.
Reported by Camilla Klein
Currently trades must be settled within three days of execution. T+1 means settling trades a day after execution, which proponents argue is necessary to handle growing trade volumes and reduce risk. Others say moving to T+1 does not make sense economically.
A SEC spokesman noted that the main goal of the rule proposal would be to gather comments from all industry segments, especially smaller players in the investment-management space. He added, “a mandated T+1 conversion is likely the only way the industry will get to a straight-through-processing environment.”
The proposal, which, according to the SEC could be out for comment for approximately three months, will likely come out this summer.