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Financial Institution Letter

Securities Transaction Settlement Cycle

April 27, 2023  |  FIL-21-2023


FDIC regulations at 12 CFR 344.7 require FDIC–supervised institutions to settle most securities transactions within the number of business days in the “standard settlement cycle followed by registered broker dealers in the United States” unless otherwise agreed to by the parties at the time of the transaction.  The regulation specifies that FDI–institutions must determine the number of business days in the standard settlement cycle by reference to SEC Rule 15c6–1, 17 CFR 240.15c6–1, which is the settlement cycle applicable to registered broker dealers.

The Securities and Exchange Commission (SEC) is adopting rule amendments to shorten the standard settlement cycle for most broker–dealer transactions from two business days after the trade date (‘‘T+2’’) to one business day after the trade date (‘‘T+1’’), with a compliance date of May 28, 2024.  FDIC-supervised institutions are advised to update their systems, operations, and processes to facilitate an orderly transition to a T+1 settlement cycle by such date.

Statement of Applicability: The contents of, and material referenced in, this FIL apply to all FDIC–insured financial institutions.


  • The SEC is adopting rule amendments to shorten the standard settlement cycle from “T+2” to “T+1” for most broker–dealer transactions.
  • The SEC rule implementing the shortened settlement is effective on May 5, 2023, with a compliance date of May 28, 2024. For additional details, please refer to the SEC rule as published in the Federal Register, 88 FR 13812 (March 6, 2023).
  • For many FDIC-supervised institutions, the majority of the changes needed to implement T+1 will have been completed by third–party industry custodians, systems and service providers, broker– dealers through which institutions trade for themselves or on behalf of their fiduciary and custody accounts, and broker–dealers providing retail securities brokerage services to institution customers.

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Related Topics:

Capital Markets
Trust/Fiduciary Activities