Settlement (T+1)
Also called: T+1, T+2, trade settlement, settlement date
Settlement is the moment cash and securities actually change hands, some time after the trade is agreed. US equities moved to T+1 — one business day — in 2024, halving the window in which a counterparty can fail and cutting the margin the system must hold against it. The trade-off is operational: less time to fix errors, fund currency conversions, or recall loaned stock, which shifts the burden onto foreign investors in other time zones.