In the securities industry, this conversion has been labeled T+3 settlement, which is shorthand for settlement on trade date plus three business days.
The conversion to T+3 settlement should not directly affect new-issue sales by issuers of municipal securities.
The oft-repeated mantra that has brought T+3 settlement to U.S.
securities markets are moving to T+3 settlement and discusses how the securities industry - and the municipal securities industry in particular - is coping with the change.
While the Securities and Exchange Commission (SEC) has been the primary regulatory force behind T+3 settlement in the United States, the idea originated with the Group of Thirty, an international, nonprofit organization of world financial leaders.
securities markets to help meet the T+3 and the same-day funds payment goals.
It is the movement to T+3 settlement, however, that thus far has consumed much more of the industry's time and attention.
It became clear by November 1991 that there would not be a consensus on T+3 settlement among securities firms in the United States.
In February 1993, the SEC, relying heavily on the findings of the task force report (known as the Bachmann Report), proposed Securities Exchange Act Rule 15c6-1 to establish T+3 settlement as the standard settlement cycle in the United States.
The Municipal Securities Rulemaking Board noted that the municipal securities market differed considerably from the corporate securities market and would present some unique challenges in moving to T+3 settlement.
Instead, the commission asked the MSRB to take responsibility for converting the municipal securities market to T+3 settlement and urged that this be done within the same time frame as for other securities transactions governed by Rule 15c6-1.