The Municipal Securities Rulemaking Board recently proposed amendments to MSRB Rules G-12 and G-15 that would shorten the settlement cycle from T+3 (trade date plus three business days) to T+2 (trade date plus two business days) for transactions in municipal securities. This proposal is contingent upon the Securities and Exchange Commission adopting similar rule amendments to create a T+2 settlement cycle for most securities other than municipal and U.S. government securities.
MSRB Rules G-12(b)(ii) and G-15(b)(ii) currently define the regular-way settlement cycle for municipal securities as T+3. These rules have historically been amended to align with Rule 15c6-1 under the Securities Exchange Act of 1934 which defines the regular-way settlement cycle for most securities other than municipal and U.S. government securities as T+3. The relevant provisions of these MSRB and SEC rules were last amended in 1995 to support an industry-led initiative to shorten the settlement cycle from T+5 to T+3.