Trading, Accounts & Prohibited ActsQuestion 178 of 398
Under current regular-way settlement for corporate stocks, when does settlement occur relative to the trade date?
a.Same day as the trade (T+0)
b.Three business days after the trade (T+3)
c.Two business days after the trade (T+2)
d.One business day after the trade (T+1)
Explanation
Regular-way settlement for equities, corporate bonds, and municipal securities is T+1, meaning one business day after the trade date. The industry moved from T+2 to T+1 to reduce counterparty risk and speed the exchange of cash and securities.
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