3.2 Trade Settlement (T+1) & Clearance
Trade settlement represents the official exchange of cash and securities. All calculations reflect SEC Rule 15c6-1 standard T+1 settlement.
Key FINRA Exam Takeaways
- Regular-Way Settlement: T+1 (1 business day after trade date) for corporate equities, municipal bonds, corporate bonds, and Treasuries.
- Options Settlement: Settles next business day (T+1).
- Cash Settlement: Same-day settlement (trade date = settlement date).
- Regulation T Payment Deadline: Trade Date + 2 business days (T+2).
- Failure to Pay: Broker-dealer cancels or liquidates the position and freezes the account for 90 days.
Knowledge Checkpoint • Section 3.2
Under current SEC settlement rules, if a customer purchases 200 shares of stock on Wednesday, June 10, when does regular-way settlement occur?