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T+1 refers to "trading day plus one business day" in a trade settlement cycle. On May 28, 2024, settlement cycles on any U.S. securities trade changed from two business days to one, putting trade settlement for stocks, bonds, and related assets on the same timetable. Two-day securities settlement, known as T+2, was the standard since 2017 when the U.S. Securities and Exchange Commission amended its rules to shorten settlement from three days. Mexico, Argentina and Canada also moved to T+1 settlement on May 27, 2024. [1]

The last time share trades at the New York Stock Exchange settled in a single day was in the 1920s. T+1 was eventually abandoned during that era because trading volumes became unwieldy. The switch to T+1 in 2024 is intended to reduce risk in the financial system, although there are worries that in the beginning there may be some potential trading issues such as international investors struggling to source dollars on time, global funds moving at different speeds to their assets, and everyone having less time to fix errors.[2] When settlement was T+2, buyers and sellers of securities were allowed two days after a deal was executed to finalize it, which gave the participants time to deliver the money or commodity.

One of the reasons for the switch to T+1 was the recent extreme market swings, particularly in 2020 during the early days of the Covid-19 pandemic and during the meme stock mania of early 2021. And then there was the crash of Robinhood, which blocked its customers from buying a number of popular stocks through its app.[3]