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Trade Plus One Settlement (T+1)

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On the 28th of May 2024, US and Canadian equity markets moved from a T+2 settlement (today plus two days settlement) to T+1 settlement. This shortens the period between placing a trade in the equity market and the date that cash must be available to settle the trade or providing the securities when they are sold.

What this means for clients?

If you are buying US and Canadian securities, you will need to ensure HHG has access to cleared funds in your custodial bank account in the correct currency before placing an order in one of these markets. On the upside, if you are selling US or Canadian securities, payments to

you will be able to be made a day earlier.

Given the time zone differences between the trading hours in the US and Canada (that are traded overnight) and those in New Zealand, the settlement will occur the following morning, which is why there is a need for funds to be cleared in advance.

As a result, if you are buying and selling across different equity markets, your adviser will anticipate a date mismatch and switch funds prior to placing a buy, or they may delay placing a purchase until funds become available from a sell.

For example, the settlement dates in the US and Canadian equity markets now differ from other international markets, so a sell in NZ or Aussie may need to be placed a day ahead of the US or Canada and allow funds to be available at T+1 for your US or Canadian buy.

In time, all equity markets will move to T+1. Time differences between countries will remain as will the need to have available cleared funds to settle buys or shares to settle sells.

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