Rule 15c6-2 in Practice: Agreements or Procedures

Updated October 2026, after T+1 took effect. First published January 2024.

SEC Rule 15c6-2 has applied since May 28, 2024. It gives a broker-dealer two ways to meet one goal: finishing the allocation, confirmation, and affirmation of an institutional trade "as soon as technologically practicable and no later than the end of the day on trade date." The firm can sign written agreements with the other parties, or it can establish, maintain, and enforce written policies and procedures.

The SEC expected nearly all firms without existing agreements to pick the second option. This post covers who has to comply, when an agreement still makes sense, and what each required element of the policies and procedures has to say. The quotations and examples come from the SEC's adopting release unless noted. For the rest of the release, see our reference to the T+1 rules.

Who Has to Comply

The rule applies to "any broker or dealer engaging in the allocation, confirmation, or affirmation process with another party or parties" for a trade subject to Rule 15c6-1(a). It follows that rule's scope, so municipal and government securities are out. SEC staff confirmed in their March 2024 FAQ that a trade whose settlement the parties extended past T+1 is still covered.

The release works through the executing broker and clearing broker case. An executing broker that doesn't take part in allocation, confirmation, or affirmation has no obligation under the rule. The clearing broker that settles the trade does take part, so it has to comply. If the executing broker takes on some of the work for its customer, its arrangements with the clearing broker generally should say that the clearing broker is the firm "engaging in the allocation, confirmation, and affirmation process." Without a written agreement between them, the executing broker should consider whether it needs procedures that explain its role.

Option 1: Written Agreements

The agreement has to be with "the relevant parties," which the SEC described as the customer, its investment adviser, its custodian, or another agent acting for it. The firm only needs agreements with parties that have a role in the process. The rule sets no required terms for the agreement, so the parties can negotiate whatever fits the relationship.

This option makes sense where a commercial agreement already exists. The SEC said firms with written agreements covering their relationships with advisers, custodians, or other agents "may find it efficient to revise these written agreements." It also listed why new agreements are hard to get: a client may not authorize its adviser to sign one, several third parties may each handle part of the process, and some DVP and RVP relationships run on industry practice and SRO rules without any formal agreement.

Option 2: Policies and Procedures

Paragraph (b) lists five things the procedures must do. Here is what each one means in practice, based on the release.

(b)(1) Describe the Systems and Processes, by Relationship Type

The procedures have to identify and describe the technology, operations, and processes the firm uses to coordinate with advisers and custodians. The SEC expects firms to sort their relationships into categories, because each type settles differently. Its examples are a customer whose securities are held by a prime broker versus one whose securities are held by a bank custodian, a customer who deals with the firm directly versus one whose adviser does, and counterparties in other time zones or jurisdictions. It also said a broker-dealer generally should seek written assurances from advisers or custodians that they understand their role.

(b)(2) Set Target Times on Trade Date

The procedures must set target time frames on trade date for allocation, confirmation, and affirmation. They don't have to be the same for everyone. For high-volume, highly automated customers in the same time zone, the SEC said targets should be "very close in time to trade execution." For a customer in another time zone, or one with a separate custodian, the firm can set targets that reflect the extra work, based on how long each step actually takes for that category.

The rule doesn't define "end of the day on trade date," and the SEC declined to define it. The release says a firm may define that term and the others in its own procedures. We'd anchor the definition to DTC's 9:00 p.m. ET affirmation cutoff, since a trade affirmed later has to settle through a costlier night or day delivery order. Whatever you choose, write it down.

(b)(3) Communicate Trade Details and Fix Discrepancies

The procedures must describe how the firm promptly communicates trade information, investigates discrepancies, and adjusts the trade information so the targets can still be met. The SEC's purpose here is narrow: nothing "fully within the broker-dealer's own control" should be what stops an affirmation. Settlement instruction errors belong in this section. Our post on standing settlement instructions covers why.

(b)(4) Escalate When Others Are Late

The procedures must describe how the firm identifies and handles delays when an adviser or custodian is slow to allocate or affirm, and when the firm itself is slow to confirm. The release says firms generally should take reasonable steps to escalate with their customers or the parties acting for them. It also suggests procedures for recurring problems, "particularly if they recur with respect to one particular counterparty, customer, or custodian that, for example, routinely fails to meet the broker-dealer's targets."

(b)(5) Measure, Monitor, and Document the Rates

The firm must measure, monitor, and document how many allocations, confirmations, and affirmations finish as soon as technologically practicable and no later than the end of trade date. The release adds that firms should also track completion within their own target times, and use the numbers to find where the procedures fall short and revise them.

What Compliance Does and Doesn't Require

Missing the deadline on a single trade isn't a violation by itself. The SEC said a broker-dealer violates Rule 15c6-2 only if it fails to have the agreements, or fails to establish, maintain, and enforce reasonable procedures. The enforcement part has teeth, though. The release reads it to mean the firm has designed its systems and "deployed sufficient resources" to handle failures within its own process.

A good average doesn't settle the question either. SEC staff said a 90% same-day affirmation rate doesn't satisfy the rule, because it applies to each transaction. Investment advisers don't need their own procedures under Rule 15c6-2, but they do have to keep time-stamped records of allocations and affirmations under Advisers Act Rule 204-2. Our post for investment advisers covers that side.

Where We'd Start

Build the counterparty inventory first: for each account, who allocates, who affirms, and how (central matching, self-affirmation, or a prime broker). Four of the five elements depend on it. The categories for (b)(1), the targets for (b)(2), the escalation contacts for (b)(4), and the rate reports for (b)(5) all come from that list. A firm that writes its procedures first and its inventory second ends up with procedures that describe a business it doesn't quite have.

This post is for informational purposes only and does not constitute legal advice. For guidance on specific regulatory obligations, consult your counsel or compliance advisor.