SIE practice questionhardSettlement Cycles
The standard settlement cycle for most U.S. equity trades is:
- AT+3 (three business days after trade date)
- BT+1 (one business day after trade date)✓ Correct answer
- CT+0 (same day)
- DT+2 (two business days after trade date)
Explanation
Why B — T+1 (one business day after trade date)
As of May 2024, the standard settlement cycle for most U.S. equity and corporate bond trades is T+1, meaning settlement occurs one business day after the trade date. This was shortened from T+2 to reduce counterparty risk and align with technological capabilities. U.S. government securities settle T+1, and options settle T+1 as well. Some money market instruments settle same day (T+0).
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