Wall Street is about to see its biggest trading change in years

Buying or selling a stock is about to get a lot snappier starting next Tuesday. But that doesn’t mean it’ll get smoother – and some financial firms are preparing to handle any possible bumpiness.

A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link. Buying or selling a stock is about to get a lot snappier starting next Tuesday. But that doesn’t mean it’ll get smoother, at least right away — and some financial firms are preparing to handle any possible bumpiness. The current standard settlement cycle for broker-dealer transactions is “T+2.” That means that it takes two business days from when you buy a stock to when that transaction “settles,” or when the stock is officially transferred to the buyer’s account and cash is delivered to the seller’s account. That’s been the norm since 2017. Starting May 28, that cycle will take just one business day, or “T+1.” “For everyday investors who sell their stock on a Monday, shortening the settlement cycle will allow them to get their money on Tuesday,” Gary Gensler, chair of the Securities and Exchange Commission, said in a press release. “It will make our market plumbing more resilient, timely and orderly.” These new rules will apply to stocks, bonds, municipal securities, exchange-traded funds, some mutual funds and limited partnerships that trade on an exchange. Broker-dealers and registered investment advisors will also have to follow new recordkeeping rules.