After the Securities & Exchange Commission (SEC) announced upcoming rule changes to shorten the settlement period for most U.S. securities from two business days after the trade date (T+2) to one business day after the trade date (T+1), Charles Schwab Corporation (NYSE:SCHW) has responded with a blog post.
Schwab’s blog post titled “7 Things To Know About T+1 Settlement,” notes that this adjustment, set to take effect on May 28, is a response to the advancements in technology and changing preferences among users.
The transaction date is the day on which a user buys or sells a stock. The settlement date is when that trade becomes official. Although the new cycle just changes the settlement date by one day, it could have tax implications, as investors will be assigned their stock one day earlier.
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