On September 5, the regular settlement cycle for most securities transactions in the United States will change from three days (T+3) to two days (T+2). In order to assist derivative market participants that have existing equity derivative transactions with payment dates based on T+3, the International Swaps and Derivatives Association (ISDA) has developed the 2017 OTC Equity Derivatives T+2 Settlement Cycle Protocol (“T+2 Protocol”). The T+2 Protocol, which is scheduled for publication on July 28, provides a simple means for parties to amend relevant swap documentation to be consistent with the new T+2 settlement cycle, thus eliminating undesirable mismatches between cash market settlements and payments in equity derivatives after September 5. The T+2 Protocol works like other ISDA protocols, so that an adherent is deemed to have amended its documentation with each other adherent in the manner provided by the protocol.
When published, the T+2 Protocol will be available here.