WASHINGTON — The Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. have signed off on an abbreviation of the settlement cycle for securities to two days from three days.
The change from “T+3 to “T+2” for all securities bought or sold by national banks and FDIC-supervised institutions was made following an “industry-wide shift,” the regulators announced Friday.
“The current OCC and FDIC regulations on settlement periods do not interfere with banks’ adapting to the T+2 settlement cycle, but the agencies are proposing amendments to these regulations to further align them with T+2,” the regulators said in a press release.
“A shorter settlement cycle will directly reduce banks’ counterparty settlement risk and reduce systemic risk,” the release said.
The switch will go into effect Tuesday.