1. 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 CA financial institutions will settle in one business day after their transaction date.
Example
If you execute a transaction on Monday, it will settle on Tuesday (assuming Tuesday is not a holiday).
To learn more, click here.
2. When will the T+1 settlement start?
The new T+1 settlement cycle will take effect from May 27, 2024.
3. Which securities are applicable to the T+1 settlement cycle?
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, and certain mutual funds on CA exchanges.
4. What does this mean for trading?
The new T+1 settlement cycle does not impact your trading. You can still engage in day trade.
5. 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.
6. How does this impact withdrawal?
You will have quicker access to your funds with the shortened settlement cycle for CA stocks.
7. How does this impact the calculation of buying power?
The new T+1 settlement cycle does not impact the calculation of buying power.