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Your Trades Will Soon Spend Less Time Stuck in Market’s Plumbing

  • U.S. catches up to Europe, shifting trade clearing to two days
  • Two days is sluggish given light-speed pace of modern markets
Traders work on the floor of the New York Stock Exchange.
Photographer: Jin Lee/Bloomberg

Settling stock and bond trades in the U.S. is about to get a lot faster as regulators cut the after-trade wait to two days from three, freeing up capital that would otherwise be frozen.

Stock trades as well as corporate and municipal bonds purchases will settle in two days starting on Sept. 5, down from the three-day standard in place since the 1990s. On the same day, equities in Mexico will also shift to T+2 settlement -- the industry jargon for the practice -- as will Canadian stocks and bonds.