The Securities Industry Association has called on the Securities and Exchange Commission (SEC) to refrain from moves to shorten the settlement cycle to less than three days.
In a letter to the US regulatory body, Jeffrey Bernstein, chairman of SIA's STP Steering Committee and senior managing director, Bear Stearns and Co., stated that the industry should continue to focus its efforts on achieving STP, and that shortening the settlement cycle should not be considered at this time.
"Many of the steps necessary to implement a shortened settlement cycle are not yet in place," says the SIA. "However, the STP projects already in progress will mitigate risk in the clearance and settlement processs, one of the key incentives to shortening the time it takes to complete the cycle."
The industry lobby group was responding to an SEC paper released in March calling for public comment on a range of proposals to improve the safety and operational efficiency of US trade processing.
The SIA task force responsible for drafting the response urged the Commission to work with the industry to facilitate STP and achieve the goals of same-day affirmation/matching, elimination of physical certificates, and other STP milestones.
SIA also called on the SEC to encourage issuers to use the Direct Registration System and to support other industry initiatives to eliminate physical certificates.