The US shares move to T+1 settlement from the current T+2 will have quite a few impacts on brokerage operations and customers. Could @acamp let us know more details about this and in particular cover the following use cases:
FX spot being T+2, does it mean will execute our FX by requesting early T+1 settlement in order to pay for our US stock buy?
If we sell non-US stocks, which for the time being will keep settling T+2, will we have to wait the day following our non-US stock sale before being able to place a US stock buy?
More questions from the community are welcome so I can add them here.
Thanks for these questions. As you mentioned, this change to the US settlement cycle is a big one that will be happening from the end of May. Many of these changes will occur behind the scenes however, and we’re doing the required work to make the transition as smooth as possible.
On your first question, we’ve built the ability to request FX with different settlement dates (i.e. T+1 for US trading) to address this.
On your second question, we’ve undertaken the work so that there is no need for customers to wait to purchase US shares. We will be allowing a settlement mismatch so that customers can continue trading with unsettled cash from T+2 sell orders. In doing this, we are taking on some risk so we’ll have internal limits set and in rare cases there could be a day or so when you’re unable to buy US shares with unsettled cash.
The other point to note is that there are also discussions starting about UK and EU settlement moving to a T+1 cycle. This is still a few years off, though!
brokerage operations and customers. Could @acamp let us know more details about this and in particular cover the following use cases: