U.S. Stock Markets Transition to T+1 Settlement Cycle on May 28th

May 28, 2024, 12:03 PM

Starting May 28, 2024, the U.S. stock markets have transitioned from a T+2 to a T+1 settlement cycle. This change, mandated by the U.S. Securities and Exchange Commission (SEC), means that trades will now settle one business day after the trade date instead of two. The move aims to reduce risk, improve liquidity, and enhance market efficiency. However, it also presents operational challenges and initial hurdles, particularly for the ETF market. The transition marks the fastest settlement cycle on Wall Street in a century, aligning the U.S. with other markets like Canada, which has already moved to T+1 settlement.