WASHINGTON -- A task force formed by the Securities and Exchange Commission last year has recommeded reducing the settlement cycle for securities trades to three days from five by July 1994.

The shorter cycle "will uncover potential problems before they mushroom or begin to cascade through the industry," task force chairman John Bachmann, chairman of Edward D. Jones Co., said Tuesday.

The three-day payment cycle has also been endorsed by members of the Group of 30, a research body of bankers and others who negotiate international trading standards.

The SEC report recommends streamlining the handling of stock certificates but stops short of proposing that they be eliminated entirely.

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