On February 15, 2023, the Securities and Exchange Commission (SEC) adopted a set of rule amendments and new rules to facilitate the shortening of the standard settlement cycle for most broker-dealer transactions from two business days after the trade date (or T+2) to one business day after the trade date (or T+1). 

The compliance date for the T+1 timeline is next Tuesday, May 28, 2024 – immediately after Memorial Day.  Yesterday, SEC Chair Gensler issued a statement on the upcoming implementation date.

The SEC originally established a standard settlement cycle of three business days (or T+3) for most securities transactions in 1993. In 2017, the SEC shortened the standard settlement cycle from T+3 to T+2. 

For issuers and offerings, involved parties can still agree to a longer settlement cycle for firm commitment underwritten offerings. Also, the default timeline for offerings that price after 4:30 p.m. Eastern  will be T+2, though it is expected the majority of equity transactions will close one day after trading begins.