On May 28, 2024, settlement cycles on U.S. securities trades will move from two days to one. Here are seven things for investors to know.
The T+1 settlement cycle will likely mean convenience for many investors
Dividend investors may want to review strategy post-T+1 official start date
T+1 settlement launches in the United States May 28, 2024—Mexico and Canada will start a day earlier
For many investors, making a trade feels like an instant process. But there are actually two important dates involved in any trade that investors should know and understand—and one of them is about to make an important change.
The transaction date is the day you successfully execute a trade. The settlement date is when that trade becomes official. It’s the date when payment is due for purchases, when securities sold must be delivered, and the security’s transfer agent has verified the new shareholder and removed the former one.
On May 28, 2024, settlement cycles on any U.S. securities trade will change from two business days to one. For most investors, this event may have little or no impact. But for some, the time it takes to settle a trade can significantly influence portfolio and trading decisions (more below).
Known officially as T+1 (trading day plus one business day), this transition will put trade settlement for stocks, bonds, and related assets on the same one-day timetable. Two-day securities settlement—currently known as T+2—has been the standard since 2017 when the Securities and Exchange Commission (SEC) amended its rules to shorten settlement from three days.
How will T+1 affect you and your investments? Here are a few key things to know:
On May 28, 2024, T+1 arrives for U.S. investors, trimming the settlement cycles for securities trades from two days to one. For some investors, one-day settlement cycles may mean greater convenience. For others, T+1 may require closer attention to how shorter settlement times could affect one’s investment, trading, or tax decisions. To learn more about how this transition could affect your individual situation, consider reaching out to a qualified advisor.
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