What You Need to Know About the New T+1 Equity Settlement Days Standard

Starting May 28, 2024, the way securities transactions settle is about to get faster—and you may need to adjust your trading habits. The Securities and Exchange Commission (SEC) and FINRA have approved a significant change to equity settlement cycles: transactions that currently take two business days to complete will soon settle in just one business day, known as T+1.

From T+2 to T+1: The Timeline Shift

For decades, the standard equity settlement days framework operated on a T+2 basis, meaning two business days elapsed between your trade date (when you execute the transaction) and the settlement date (when funds and securities actually change hands). On May 28, 2024, this timeline compresses to T+1—settlement occurs the very next business day.

To illustrate: if you sell stock shares on a Tuesday under the old T+2 system, settlement happens Thursday. Under T+1, that same Tuesday sale settles Wednesday. The change applies broadly to stocks, bonds, municipal securities, exchange-traded funds, and certain mutual funds traded on exchanges.

Why This Matters: The Technology Behind the Shift

This isn’t the first overhaul of equity settlement days. In 2017, the SEC already shortened cycles from T+3 to T+2. Today’s move to T+1 capitalizes on digital infrastructure improvements that eliminate the need for extended timelines. When most trading and banking operate entirely online, the extra days previously required for physical securities delivery or fund transfers are obsolete.

By aligning equity settlement days with the already-established T+1 schedule for options and government securities, the market creates consistency across asset classes.

What Changes for Your Account

The practical implications depend on your trading habits and account setup:

Cash Accounts: If your brokerage requires funds to be available before purchase execution, you’ll notice minimal disruption. However, if you typically initiate ACH transfers the day after trading, you’ll now need to move money earlier to ensure deposits clear by the accelerated settlement date.

Securities Delivery: For the rare investor holding physical paper certificates, earlier delivery to your broker-dealer becomes necessary. Most investors hold securities electronically, in which case your broker handles delivery one day sooner automatically.

Margin Accounts: While initial margin call requirements shrink from T+5 to T+3, maintenance margin calls remain tied to when the call occurs—the change to T+1 equity settlement days doesn’t alter these timelines.

Preparing for the Transition

Contact your broker-dealer to confirm how T+1 equity settlement days affects your specific situation. Those relying on delayed ACH payments or holding unusual security types should prioritize this conversation. For most investors, the shift represents a streamlined, modernized settlement infrastructure—one more reflection of how digital markets continue to reshape finance.

The move aligns with broader efforts to strengthen market efficiency while maintaining investor protections, a priority emphasized by both FINRA and SEC oversight.