What does T+1 Settlement mean?

Effective May 28, 2024, the standard settlement cycle was shortened from T+2 (trade date plus two business days) to T+1 (trade date plus one business day). This change was part of an industry-wide initiative to enhance efficiency and reduce the risk in the securities settlement process.

What does T+1 settlement mean?
Under the new “T+1” settlement cycle, all applicable securities transactions from US financial institutions now settle in one business day of their transaction date.

What this means for You:
As a result of this adjustment, trades executed on or after May 28, 2024, now settle on the next business day. For example, if you sell shares of ABC stock on Monday, the transaction will settle on Tuesday.

Fed Call / Reg T (Initial purchase or short):
Payment period for Fed Call is now reduced by one day to T+3.

House Call / Maintenance Call:
Payment period is now reduced by one day to T+1.

Cash Accounts:
Purchases and Sales now settle on the next business day. Cash received from closing a position is available on the next business day.

What this means for Shorting Stock:
Reg SHO 204 buy-in: Reg SHO 204 requirements and when a possible buy-in will occur changed from T+3 to T+2.