T+1 Settlement: The Rule Change Every SIE Candidate Needs to Know

If you’re studying for the SIE exam from an older textbook or a course that hasn’t been updated, there’s a good chance you’ve already memorized something that’s now wrong. The culprit: the move to T+1 settlement.

This isn’t a minor footnote. It changed one of the most heavily tested concepts on the exam — the ex-dividend date. Let’s break it down.

What Actually Changed

On May 28, 2024, U.S. securities markets shortened the standard settlement cycle from T+2 to T+1.

• T = trade date (the day you buy or sell)
• +1 = one business day later, when securities and cash actually change hands

So if you buy stock on a Monday, it now settles on Tuesday instead of Wednesday.

This is part of a long-running trend toward faster settlement:

• Before 2017: T+3
• 2017–2024: T+2
• May 2024 onward: T+1

The goal each time has been the same — reduce the risk that one side of a trade fails to deliver, and free up capital that would otherwise be tied up waiting for settlement.

What Settles T+1

Under the new “regular way” cycle, T+1 applies to nearly everything you’ll see on the exam:

• Common and preferred stock
• Corporate bonds
• Municipal bonds
• ETFs
• Options (already T+1 before the change)
• U.S. Treasuries (already T+1 before the change)

The only common exception is cash settlement, which is T+0 — same-day settlement, by special arrangement between the parties.

The Exam Trap: Ex-Date Now Equals Record Date

Here’s the part that trips up students using outdated materials.

Older study guides teach this rule: the ex-dividend date is one business day before the record date.

That was true under T+2. It is no longer true.

Because trades now settle one day faster, a buyer who purchases shares the day before the record date still settles in time to be on the company’s books. The result:

Under T+1, the ex-dividend date and the record date fall on the same day.

If you see a question that asks you to count back from the record date to find the ex-date, the answer is now zero days — they’re the same date. Any explanation telling you it’s “one business day before” is built on the old rules.

The underlying logic for the exam hasn’t changed: you must own the stock before the ex-date to receive the dividend. Buy on or after the ex-date, and the seller keeps the dividend. Only the timing math moved.

A Quick Global Note

The U.S. didn’t move alone. Canada and Mexico transitioned to T+1 on the same day. The EU and UK are scheduled to follow in October 2027. The SIE focuses on U.S. rules, but it’s worth knowing the U.S. led this shift.

What to Memorize for the SIE

Keep this short list locked in:

• Regular-way settlement = T+1 for virtually all securities
• Cash settlement = T+0 (same day, special request)
• Ex-dividend date = record date (same day under T+1)
• Buy before the ex-date to receive the dividend — that rule never changed

The Bottom Line

Settlement got faster, and a classic exam concept moved with it. If your study material still says “ex-date is one business day before record date,” it’s testing you on a rule that expired in May 2024. Make sure every resource you’re using reflects the T+1 world — because the SIE does.

Related resources

• The SIE exam glossary — 170 terms in plain English, including T+1 and the other recently changed rules
• Every number and formula on the SIE — a current one-page reference, with the figures that changed since 2024

---

Studying for the SIE? The Pangolin Edge SIE Prep Course is fully updated for the current rules, including T+1 settlement and the new dividend date math — so you’re never caught memorizing something the exam no longer asks.