US Stock Trading Regime Returns to T+1 of 100 Years Ago

On May 28, 2024, the US Securities and Exchange Commission (SEC) applied the T+1 timeframe for transactions on the US stock market. This means that transactions on the stock market will take place 1 day later than normal. This is the trading speed of this market from 100 years ago.

The US stock market returns to T+1 trading mode like 100 years ago (Photo TL)

The SEC said that the application of T+1 transaction time is to help reduce the risk of this market in the financial system. When applying T+1, transactions take place more slowly, and at the same time, it will reduce the risk of buyers and sellers when the transaction is completed. Even US government bonds have been and are applying T+1.

Immediately after the T+1 implementation, a number of concerns were raised by investors. The first was the difference in transaction matching time of global investment funds. Investment funds in many countries will have to process their assets at a different speed than before. This significantly affects the investment strategies of the funds.

The last time the US stock market used the T+1 trading regime was in the 1920s. However, this regime was later terminated because most of the transactions were done manually. The large trading volume caused the market to adjust to the T+5 regime and then gradually adjust to T+2 from 2017.

In the Vietnamese stock market, the trading regime is still implemented at T+2. The trading regime is expected to be reduced to T+0 when the KRX trading system is applied to the Vietnamese stock market.

Source: https://www.congluan.vn/che-do-giao-dich-chung-khoan-my-quay-ve-moc-t1-cua-100-nam-truoc-post297166.html