Stage Set for Shortened Trade Settlement Cycle for Municipal Securities

Date: May 2, 2016

Contact: Jennifer A. Galloway, Chief Communications Officer


Washington, DC – The Municipal Securities Rulemaking Board (MSRB) has received approval from the Securities and Exchange Commission (SEC) to move toward a shortened settlement cycle for municipal securities. The MSRB was the first regulator to advance a rule change proposal in support of an industry-wide initiative to reduce the time between trade execution and settlement of the transaction by one business day.

“The MSRB fully supports the industry’s efforts to expedite the settlement process and enhance market efficiency,” said MSRB Executive Director Lynnette Kelly. “We are pleased to be among the first regulators to prepare for this important initiative. The benefits of moving to T+2 will enhance the overall efficiency of the securities markets, promote financial stability and better align the U.S. securities markets with global markets.”

Provisions related to settlement cycles in MSRB Rules G-12, on uniform practice, and G-15, on confirmation, clearance, settlement, have been unchanged since 1995. The SEC’s approval sets the stage for the MSRB to coordinate with fellow regulators and the industry in order to transition to a shortened settlement cycle.

The MSRB protects investors, state and local governments and other municipal entities, and the public interest by promoting a fair and efficient municipal securities market. The MSRB fulfills this mission by regulating the municipal securities firms, banks and municipal advisors that engage in municipal securities and advisory activities. To further protect market participants, the MSRB provides market transparency through its Electronic Municipal Market Access (EMMA®) website, the official repository for information on all municipal bonds. The MSRB also serves as an objective resource on the municipal market, conducts extensive education and outreach to market stakeholders, and provides market leadership on key issues. The MSRB is a self-regulatory organization governed by a 21-member board of directors that has a majority of public members, in addition to representatives of regulated entities. The MSRB is overseen by the Securities and Exchange Commission and Congress.