3rd QTR TOP VIEW: Items for Attention

T+2 Shortened Settlement Cycle

Following the 2008 financial crisis, our industry has increased its focus on reducing risk, achieving greater transparency, and improving efficiency in order to establish a safer market environment.

On September 5, 2017, the financial industry shortened the settlement cycle process that underlies a significant volume of U.S. financial activity. Specifically, the settlement cycle will shorten from three business days after the trade date (“T+3”) to two business days after the trade date (“T+2”). This change will reduce a number of risks for individual investors and the financial markets as a whole, including credit risk, market risk, and liquidity risk and, as a result, systemic risk.

Shortening the settlement cycle to T+2 on September 5, 2017, is expected to provide immediate benefits including expediting the movement of cash and securities. In addition, the move to T+2 will increase the global settlement harmonization of U.S. securities as it will align the settlement cycle with other global markets (European Union, Hong Kong, etc.).

Products subject to the shortened settlement cycle include:

• Equities

• Corporate and municipal bonds

• Unit Investment Trusts

• Other financial instruments comprised of these security types (i.e., mutual funds, ETFs, ETPs, ADRs, options, rights, and warrants)

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