Under standard SEC and FINRA rules governing secondary market equity transactions, what is… — FINRA SIE (Securities Industry Essentials)

Under standard SEC and FINRA rules governing secondary market equity transactions, what is the regular-way settlement cycle for a purchase of corporate common stock?

Trade date plus one business day ( $T+1$ )Answer
B
Trade date plus two business days ( $T+2$ )
C
Same-day cash settlement maintained directly by the National Securities Clearing Corporation (NSCC) custody depository
D
Trade date plus one business day, requiring a principal mark-up disclosure on all customer trade confirmations

Answer

Trade date plus one business day (

T+1

)

Under current SEC and FINRA rules, regular-way settlement for corporate common stock occurs on

T+1

, meaning ownership transfer and payment finality occur one business day after the trade execution date.

Step-by-Step Solution

Determine the standard regular-way settlement timeline for corporate stock trades.

Regular-way settlement occurs on

T+1

(trade date plus one business day).

Securities and Exchange Commission (SEC) rules mandate that payment and security delivery for standard corporate equity trades settle on the business day following execution.

Key Concept

Regular-Way Settlement (

T+1

)

Estimated Time:45s

Question

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Topics