The US Securities and Exchange Commission has agreed a minor modernisation, this week announcing a change to the rule requiring a three-day settlement for securities transactions. While endorsing the reduction from three days to two, Commissioner Kara Stein held open the door to even faster settlements, saying;

“I have asked the staff to study not only the changes resulting from a movement to a T+2 settlement cycle, but also to consider further improvements”

SEC Chair Michael Piwowar said,

“As technology improves, new products emerge, and trading volumes grow, it is increasingly obvious that the outdated T+3 settlement cycle is no longer serving the best interests of the American people”  

Meanwhile, a mile away down Pennsylvania Avenue, lobbyists at the US Capitol are concerned that they’re not going to get the overhaul of the Dodd-Frank Act they were promised by the incoming Trump administration.

Enacted in 2010 in response to the banking collapse of 2008, Dodd-Frank is detested by financial sector institutions. It requires high levels of oversight and transparency, strict capital requirements and mostly bans proprietary trading.

While banks feel they’ve worn the post-collapse “hair shirt” for long enough, signals have been sent to lobbyists that they will have to wait behind controversial healthcare reforms, controversial Muslim bans, controversial wall building, controversial budget passing and controversial appointee nominations.

How the US financial sector will change and in what timescale is anyone’s guess.

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