What is the T+1 settlement cycle?
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.
When will the T+1 settlement start?
The new T+1 settlement cycle will take effect from May 28, 2024.
Which securities are applicable to the T+1 settlement cycle?
The settlement cycle for products such as stocks and exchange-traded funds traded on US exchanges will shift from T+2 to T+1.
What does this mean for trading?
The new T+1 settlement cycle does not impact your trading. You can still engage in day trade.
How does this impact margin interest?
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.
How does this impact withdrawal?
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.