Question 1

What is T+1 settlement?

Accepted Answer

Trade date (T) represents the day your order to buy or sell a security is executed; settlement date is the day your order is finalized and on which funds and the securities must be delivered. Currently, settlement date occurs two business days after trade date (i.e. T+2). If you sell shares on a stock on Tuesday, the transaction will settle two days later on Thursday…

Question 2

How will the change from T+2 to T+1 affect my account?

Accepted Answer

There will be some limited impacts depending on the nature of your accounts.

Cash accounts…

Question 3

When will the settlement cycle change from T+2 to T+1 occur?

Accepted Answer

For US products the Securities and Exchange Commission (SEC) adopted a final rule to shorten the standard settlement cycle for most broker-dealer transactions from two business days (T+2) to one (T+1) after the trade date, effective trade date (Tuesday) May 28, 2024…

Question 4

Are there potential tax issues with the change to T+1?

Accepted Answer

There is no impact to tax reporting with the change to T+1…

Question 5

What is the cut-off time for after-hours trading?

Accepted Answer

The cut-off for after hours trading of US stock remains the same as it does today; trading until 8pm ET (excluding early closes) is considered for that day’s trade…

Question 6

How will the change to T+1 affect record date for a corporate actions, dividend payments, proxy votes, or annual meetings?

Accepted Answer

With the change to T+1 settlement the standard record date will be the business day after the trade is made based on trade date plus one business day. This change will need to be considered for when to place a trade to be recognized as an owner of record…

Question 7

What products are in-scope for T+1 settlement?

Accepted Answer

US Products in scope include U.S. cash equity securities, ETFs, corporate bonds, etc. Please see the Full List of In-Scope Products from Depository Trust & Clearing Corporation (DTCC) for more details…

Question 8

Are non-U.S. clients impacted by the migration to T+1 settlement?

Accepted Answer

Yes, all clients trading U.S. products are subject to T+1 settlement…

Question 9

How can I learn more about the industry’s move to T+1 settlement?

Accepted Answer

For more information on the U.S. market’s transition to a T+1 securities settlement cycle, explore the following resources:

Question 10

Why did the industry change from a T+2 to a T+1 settlement cycle?

Accepted Answer

The change aims to improve operational efficiency in the market and reduce systemic, counterparty and operational risk in the settlement cycle…