The Financial Industry Regulatory Authority (FINRA) has passed amendments to align its rules with the SEC's amendment to Rule 15c6-1 and adoption of Rule 15c6-2 under the Securities Exchange Act of 1934, reducing the standard settlement period for most broker trades from two business days after the trading day (T + 2) to one business day after the trading day (T + 1).。

FINRA has been working with other regulators and market participants to ensure the industry is prepared for the transition to T + 1.。In this regard, FINRA has undertaken an outreach programme with certain introducing and clearing companies to discuss, among other things, the actions these companies have taken and their preparations for the transition to a shortened settlement cycle, and FINRA will undertake another such programme with other companies in the first quarter of 2024.。

In addition, FINRA has been helping to address queries and concerns raised by companies about the T + 1 delivery cycle.。

FINRA reminds companies to consider all potential impacts of the new T + 1 settlement cycle on their business and the changes needed to address them。While the potential impacts and changes will vary from company to company depending on factors such as the company's business scope, customer base, infrastructure and internal operations, FINRA recommends that companies consider the following in particular:

• settlement of ADSs and exchange-traded funds subject to foreign securities;
• Reduced time frame to ensure timely settlement of end-of-day transactions。

FINRA further reminds companies that section 15c6-2 (a) of the new rules requires any broker-dealer involved in an allocation, confirmation or confirmation process with another party to meet any of the following conditions.

• enter into a written agreement with the relevant party to ensure that the allocation, confirmation, confirmation or any combination is completed as soon as technically feasible and not later than the close of the trading day;
• Develop, maintain and implement reasonable written policies and procedures to ensure that the allocation, confirmation, confirmation or any combination is completed as soon as technically feasible and no later than the end of the trading day。

The company should discuss this requirement with all appropriate suppliers or clearing companies with which it works, and develop processes and procedures to complete the allocation, confirmation and confirmation within the necessary time。Businesses should also communicate with buyer customers who provide transaction allocation and matching information。The company should focus on ensuring that customers understand their responsibilities and the procedures in place to achieve same-day confirmations。

To help companies ensure that they are prepared for the transition to shorter settlement cycles, FINRA encourages all companies to participate in the industry's T + 1 testing program, which is designed to allow companies to test the entire transaction lifecycle, including transaction confirmation, confirmation, clearing, settlement and transaction exception processes.。

FINRA also recommended that companies use appropriate testing facilities to test changes in transaction reporting, and that the time for automatic locking and submission of matching clearing transactions to DTCC be changed from 2: 30 p.m. EDT to noon。