The transaction date, or T, is the date on which the operation of buying or selling securities is executed. The settlement date is the date on which the transaction is settled, i.e. the securities or funds are officially transferred. Under the new T+1 settlement cycle, all applicable securities transactions from US financial institutions will settle in one business day after their transaction date.
To learn more, click here.
Example
If you execute a transaction on Monday, it will settle on Tuesday (assuming Tuesday is not a holiday).
The new T+1 settlement cycle will take effect from May 28, 2024.
The T+1 settlement cycle will apply to the same types of securities transactions covered by the T+2 settlement cycle. These include stocks, bonds, municipal securities, exchange-traded funds, certain mutual funds, and limited partnerships traded on US exchanges. For the T+1 impacted product scope, click here.
*Note: The T+1 settlement cycle already applies to US stock options.
The new T+1 settlement cycle does not impact your trading. You can still engage in day trade.
The accrual date for margin interest will transition from two business days after the transaction date (T+2) to one business day after the transaction date.
You will have quicker access to your funds with the shortened settlement cycle for US stocks. For Hong Kong stocks, however, the settlement cycle remains T+2, meaning that you can withdraw your funds when they are settled two business days after the transaction date.
The new T+1 settlement cycle means a shortened settlement process for US stocks and does not impact the SmartSave mechanism.
The new T+1 settlement cycle does not impact the calculation of buying power.