Jessie Schlanderer, Portfolio Implementation Lead & Wealth Advisor
Exciting news is on the horizon for both investors (like you) and traders (like me)! We are gearing up for a significant shift as the industry moves towards implementing a T+1 settlement cycle for all stocks and funds. This change, slated to take effect at the end of May, will revolutionize the way trades are settled, offering numerous benefits and opportunities for market participants.
What is T+1 Settlement?
T+1 stands for “trade date plus one day.” If you’ve ever called in to withdraw money from your investment accounts, you’re likely aware that it can take a few days for the actual cash to get to you—if we need to sell a position to get the funds ready, it then takes 1-2 days for the trades to “settle” and then typically be overnighted to your bank. The T+1 settlement cycle generally shortens these 1-2 days to just one day for all securities, allowing for faster processing and completion of transactions.
What This Means for You
As an investor, T+1 settlement brings the potential for some notable advantages:
- Faster Access to Funds: When you sell stocks or funds, you will generally receive your cash a day sooner, providing quicker access for reinvestment or other financial needs.
- Efficient Liquidity Management: With quicker settlements, you can manage your liquidity more efficiently and capitalize on timely opportunities for your proceeds.
The move to T+1 settlement is an exciting development that will provide greater efficiency, reduced risk, and enhanced opportunities for investors and traders.
Stay tuned for more updates and insights as we move towards a faster and more resilient financial ecosystem.
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