On December 22, 2016, NASDAQ proposed to adopt new rules to conform with proposed amendments to Rule 15c6-1(a) of the Exchange Act. The SEC proposed amendments to Rule 15c6-1(a) in September 2016 to shorten the settlement cycle for most broker-dealer securities transactions to two business days, or T+2. Currently, the standard settlement cycle for these transactions is three days, known as T+3.

NASDAQ's proposal sets out the following rules that would conform to the shortened settlement period proposed by the SEC:

Because NASDAQ would not implement the proposed rules until after the SEC approves and implements its T+2 proposal, NASDAQ would retain the current versions of each rule on its books until after the proposed rules are approved. NASDAQ would then announce the effective date of its proposed rules in an Equity Regulatory Alert, which would correspond with the industry-led transition to a T+2 standard settlement and the effective date of the SEC's T+2 proposal.

The proposed rule change requires SEC approval.

Update: On February 10, 2017 the SEC approved the proposed rule change. However, the rule change will not take effect until the SEC approves and implements its own T+2 proposal.

To learn more about the SEC's T+2 proposal, see Legal Update, SEC Proposes to Shorten Securities Transaction Settlement Cycle to T+2.