SEC Chair Mary Jo White added her support recently to industry efforts to move to a two-day settlement timeline. In response to a letter from SIFMA and the ICI, White wrote that she "strongly supports" the effort, urging the industry group to "pursue the necessary steps towards achieving this important goal as promptly as possible." White cited "reduced counterparty risk, decreased clearing capital requirements, reduced pro-cyclical margin and liquidity demands, and increased global harmonization" as potential benefits of the change.
A financial industry consortium published a timeline that puts final implementation of the shortened settlement cycles in the third quarter of 2017. White noted that regulatory changes "should not hinder or slow the collective industry effort towards meeting this goal" and urged the group to provide the SEC's Division of Trading and Markets a more complete timeline with "interim milestones and dependencies" by December 18.
To facilitate the transition, White indicated that she directed SEC staff to work with the self-regulatory organizations to implement changes necessary to amend rules to require a two-day settlement cycle. She noted that she has asked the SROs to develop a schedule of necessary rule amendments by October 31. Regarding the SEC's own rules, White stated that she directed SEC staff to develop a proposal to amend Rule 15c6-1(a) to require two-day settlement. The rule currently requires three-day settlement, but White noted that the amendments "should not be seen as a precondition or an impediment to the execution of the plan."