Davis Polk Discusses SEC Adoption of T+1 Settlement, Effective May 2024

The SEC adopted a final rule to shorten the standard settlement cycle for most securities transactions from two business days (T+2) to one business day following the trade date (T+1). Many market participants had favored a September 3, 2024 compliance date (falling on the Tuesday after Labor Day) to provide more time to prepare for the transition to the shortened cycle, but the SEC adopted a May 28, 2024 compliance date (the Tuesday after the Memorial Day weekend), an extension of two months from the proposed rule.

The final rule is intended to benefit investors by reducing the credit, market, … Read more