U.S. equity markets now settle trades in one day under SEC rules, but firms push for near-instant digital settlement to cut risk and capital costs.
U.S. equity markets completed the transition to T+1 settlement in 2024, cutting the trade cycle from two days to one. The change, mandated by the SEC, aims to reduce counterparty risk and free up capital tied in collateral during the settlement period.
Industry executives say the current system, built for paper-based trading, remains outdated. Digital securities and next-generation infrastructure are prompting firms to explore real-time or same-day settlement models. The shift could further lower operational costs and improve liquidity.
While public debate focuses on extended trading hours, market participants view settlement reform as the more critical evolution. Faster settlement reduces exposure to defaults and removes friction from post-trade processes, according to industry sources.