The Office of the Comptroller of the Currency ("OCC") reminded national banks and federal savings associations (collectively, "banks") of the impending change to the standard settlement cycle for securities transactions. The OCC outlined important preparatory steps as the September 5, 2017 effective date approaches. The rule change will shorten the standard settlement cycle for securities transactions from three business days after the trade date ("T+3") to two ("T+2").
In a bulletin, the OCC told banks to establish and follow a "project plan" to ensure that all securities-related business operations are properly equipped to adjust to the industry-wide change. When developing the project plan, the OCC instructed banks to consider a number of issues, including:
- potential effects on accounting and other processing systems;
- changes to operational procedures, client agreements, and disclosures that reflect settlement time frames;
- oversight of third-party vendors handling T+2 implementation processes;
- adjustments to employee training procedures; and
- implications for risk management practices and trade monitoring.
The bulletin also referenced the OCC's "Third-Party Relationships" guidance resource for banks as they navigate the T+2 implementation process.
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