%2010.svg){kind=logo}
What changed with T+1
- The settlement cycle for most U.S. equities, corporate bonds, and ETFs moved from T+2 to T+1 in May 2024.
- Trade allocation and affirmation must complete by 9:00 PM ET on the trade date — the DTCC's stated deadline for inclusion in standard settlement.
- Exception processing windows are correspondingly shorter.
Operational implications for advisers
- Trade allocations among accounts must complete on the trade date — back-office processes that previously had a day to finalize now must complete same-day.
- Funding gaps — clients who needed to fund an account before settlement now have one fewer day to do so.
- FX timing — international clients funding USD purchases must accelerate currency conversion.
- Corporate actions and dividend record dates shifted accordingly.
What examiners and FINRA notice
Failed trades — those that don't settle on time — are operationally visible and produce regulatory reporting. Persistent failed-trade rates trigger scrutiny of the firm's operational discipline. Best execution analysis also incorporates settlement performance — a venue that produces frequent fails affects best-execution conclusions.
What didn't change
Some instruments — Treasury securities (which already settled T+1), municipal bonds (T+1 since 2023), options (T+1 historically) — were already on T+1. Other instruments — physical commodities, certain alternative investments, mutual funds with trade-date pricing — operate on different cycles entirely.
How StratiFi thinks about settlement
Settlement is operational infrastructure most clients never see. The firms that handle it well have automated allocation, affirmation, and exception workflows that complete same-day with minimal human intervention. When something fails, the exception is logged, investigated, and resolved as a routine workflow — not a fire drill.
Frequently asked questions
-
What does T+1 mean for clients?
Cash from a sale is available one business day after the trade. Cash needed for a purchase must be in the account by the trade date or the next morning. -
Are mutual funds T+1?
Most mutual funds price daily and settle on the next business day, so they were effectively T+1 already. Specific fund prospectuses define the settlement cycle. -
Did all securities move to T+1?
Most U.S. equities, corporate bonds, ETFs, and ADRs moved in May 2024. Treasury and municipal securities and options were already T+1 or shorter. Some alternatives operate on different cycles entirely.