SIE practice questioneasyT+1 Settlement
Under current SEC rules, the standard settlement cycle for most securities transactions is:
- AOne business day after trade date (T+1)✓ Correct answer
- BTwo business days after trade date (T+2)
- CSame day (T+0)
- DThree business days after trade date (T+3)
Explanation
Why A — One business day after trade date (T+1)
The standard settlement cycle for most securities (stocks, bonds, ETFs, mutual funds) is T+1, meaning one business day after the trade date. The SEC shortened the settlement cycle from T+2 to T+1 effective May 28, 2024, to reduce counterparty risk and improve market efficiency. Some instruments, like U.S. Treasury bills and options, settle on T+1 or same day.
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