Is today a Business Day? Good question, depends who you ask.

The SEC’s EDGAR filing system is closed today for the Juneteenth Holiday.  Because today is a federal holiday, today will not count as a business day in the filing periods in Rule 424(b) under the Securities Act.  This is also helpfully noted in the SEC’s announcement of an EDGAR filing holiday at:  SEC.gov | EDGAR Will Be Closed Friday, June 18, 2021.

What about the time period between pricing and settlement of a debt security, such as a structured note issued off of a medium-term note program?  This is usually 2-3 “business days,” as defined in the relevant indenture.  A typical “business day” definition for a fixed rate debt security in an indenture reads “’business day’ means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in the City of New York.”  Because today is a legal holiday, it will not be counted for purposes of the settlement period.  We don’t have to reach the question of whether or not banks in New York City are open, as many banks are open today.

Issuers and underwriters closing a transaction pursuant to an underwriting agreement may not have an extra day.  At least one bulge bracket bank holding company’s form of underwriting agreement defines a “New York Business Day,” which is used for settlement of the transaction, as “each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive order to close.”  Because today is not a bank holiday in New York City, today is a New York Business Day under that formulation.  We can assume that the drafters of that agreement thought that there would be sufficient advance notice of any federal or bank holiday.  There was very little advance notice of this federal holiday.

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