OCC Bulletin on shortened securities settlement cycle

The OCC has issued Bulletin 2024-3 reminding OCC-supervised financial institutions they should be preparing for a May 28, 2024, shortening of the standard securities settlement cycle for most U.S. securities transactions. The Securities and Exchange Commission (SEC) has adopted final rules that shorten the standard settlement cycle for most broker-dealer transactions from the second business day after the trade date (T+2) to the first business day after the trade date (T+1), beginning May 28.

The change will affect banks’ securities activities, including activities related to their investment and trading portfolios and securities settlement and servicing provided to banks’ custody and fiduciary accounts. Banks that offer nondeposit investment products through a third-party broker-dealer should assess the broker-dealer’s preparedness for the new settlement time frames.

The Bulletin includes detailed guidance on how banks should be preparing for the change.