Change in Settlement Cycle for US Stocks - Economist

What does T+1 settlement mean? Under the new "T+1" settlement cycle, all applicable securities transactions from U.S. financial institutions will settle within one business day of their transaction date.

We are writing to inform you of an important update regarding the settlement cycle for US equity transactions.

Effective May 28, 2024, the standard settlement cycle will be shortened from T+2 (trade date plus two business days) to T+1 (trade date plus one business day). This change is part of an industry-wide initiative to enhance efficiency and reduce the risk in the securities settlement process.

For example, if you sell shares of ABC stock on Monday, the transaction will decide on Tuesday. Fed Call / Reg T (Initial purchase or short): The payment period for Fed Call will be reduced by one day to T+3. House Call / Maintenance Call: The payment period will be reduced by one day to T+1.

Cash Accounts: Purchases and Sales will settle the next business day. Cash received from closing a position will be available the next business day.