Introduction
On February 15, 2023, the Securities and Exchange Commission adopted rule amendments to shorten the standard settlement cycle for most broker-dealer transactions from “T+2” to “T+1”. The compliance date for the rule amendments is May 28, 2024, at which point the standard settlement cycle will be T+1. The goal is to improve clients’ accessibility to their funds and reduce waiting time for settlement.
This communication is intended to explain the new T+1 settlement cycle and how it will affect your trading transactions on the Bamboo app.
What Will Change?
Under the new “T+1” settlement cycle, all applicable trades on the US stock market will settle in one business day of their transaction date. For example, if you sell shares of XYZ stock on Monday, the transaction will settle on Tuesday. This implies that the funds from the sell order will be available for withdrawal on your brokerage account on Tuesday as against Wednesday in the previous “T+2” cycle.
Which Securities Does the New “T+1” Settlement Cycle Impact?
The “T+1” settlement cycle will apply to transactions of the same securities covered by the “T+2” settlement cycle. These include transactions for stocks, exchange-traded funds, index funds and limited partnerships that trade on the exchange.
When Will “T+1” start?
The new “T+1” settlement cycle will apply to all applicable transactions occurring on or after May 28, 2024.
Also, from May 21, 2024, DriveWealth will no longer include Berkshire Hathaway Inc Class A (BRK.A) shares in its fractional buy trading capabilities which means users can no longer buy fractional shares for that stock.
If you have any further questions, please contact our support team at [email protected]
