FAQs about changing the US stock settlement cycle to T+1

Here you'll find quick answers to common questions about changing the US stock settlement cycle to T+1.

1. What is the T+1 settlement cycle of US stocks?

The transaction date (T) refers to the date on which a securities transaction is executed. The settlement date is the date on which the assets involved in the transaction settle. According to the new US stock T+1 settlement cycle regulations, most securities transactions will settle on the next trading day (T+1) after the transaction date (T).

Example: If you make a transaction on Monday, it will settle on Tuesday (assuming Tuesday is not a stock market holiday).

For details, please see the SEC bulletin.

2. When did the T+1 settlement cycle take effect?

The T+1 settlement cycle for US stocks took effect on May 28, 2024, Eastern Time.

3. Which types of assets are affected by the T+1 settlement cycle of US stocks?

The settlement cycle of products such as stocks, bonds, exchange-traded funds (ETFs), mutual funds, municipal securities, and real estate investment trusts (REITs) traded on US exchanges (if applicable) changed from T+2 to T+1. Click here to see applicable types of assets.

Note: US stock options were already on a T+1 settlement cycle.

4. How does T+1 settlement affect my trading?

There is no impact on trading. You can still perform intraday (T+0) trading in US stocks.

5. How is the interest of margin financing and short selling calculated after the switch to T+1?

Interest on arrears resulting from margin financing and short selling will begin accruing from T+1 (previously T+2).

6. Are there any changes in the withdrawal rules after the switch to T+1?

Due to the shortened settlement cycle from T+2 to T+1, funds from the sale of US stocks may be available for withdrawal as early as T+1. The withdrawal rules for Hong Kong stock-related assets remain unchanged, with the earliest withdrawal on T+2.

7. Are the auto-subscription and redemption rules for Cash Plus affected?

The switch to T+1 only shortens the asset settlement time after a US stock trade. The auto-subscription and redemption mechanism for Cash Plus remains unchanged.

8. After US stocks switch to T+1, Hong Kong stocks still settle on T+2. How is account buying power calculated?

The calculation of buying power remains unchanged.

Disclosures

This article is for reference only and does not constitute any investment advice.