US stock market shifts to T+1 settlement starting 28 May 2024
The US securities market is preparing for a major change in how trades are processed. Starting on 28 May 2024, most broker-dealer transactions will settle just one business day after the trade date—known as T+1. The shift follows new rules adopted by the Securities and Exchange Commission (SEC) to speed up the settlement cycle of the stock market today.
The SEC approved amendments to Rule 15c6-1, cutting the standard settlement period from two days (T+2) to one (T+1). This change applies to a wide range of transactions, including stocks, corporate bonds, and municipal securities. However, certain offerings, like firm commitment underwritten deals, will keep longer settlement times under an existing override provision.
The T+1 rule marks a significant acceleration in trade settlements for US markets. Beginning on 28 May, investors and firms will need to adapt to faster processing times in the stock market. Meanwhile, European markets continue operating under existing settlement cycles, with changes not anticipated until next year.
