Important announcement:

nabtrade will be unavailable between 00:00 and 12:45 on Sunday 26th of May for scheduled maintenance.

The US markets shift to T+1 settlement and the FX PDS update both take effect on Tuesday 28th May 2024.

FAQs

Settlement Cycle Changes

Announcing changes to the US market trade settlement cycle and associated changes to the Foreign Exchange Transactions PDS.

Settlement cycle changes

Announcing changes to the US market trade settlement cycle and associated changes to the Foreign Exchange Transactions PDS.

Due to regulatory changes, the US market is transitioning its settlement cycle from trade plus 2-business day (T + 2) settlement cycle down to trade plus 1-business day (T + 1) settlement cycle upon US market open on Tuesday 28 May 2024 (as Monday 27 May 2024 is a public holiday in the US).
 

Other markets such as London, Hong Kong Germany & the Australian market will continue to operate on a trade plus 2-business day (T+2) settlement cycle.

The Foreign Exchange Transactions PDS has been updated to reflect this change - this PDS will be effective 28th May 2024.


View the current Foreign Exchange Transactions PDS.

This regulatory change impacts nabtrade clients, as the change states that US market trade-related settlements must be completed within one business day (T+1) of the transaction’s execution to align with settlement cycle standards of the US equity exchanges.

This change will take effect for the US market upon US market open on Tuesday 28 May 2024 (as Monday 27 May 2024 is a public holiday in the US).

With the move to a trade plus 1-business day settlement cycle, investors will benefit from:

  1. Access to your cash or securities resulting from a US market trade one day earlier; and 
  2. Reduced delivery risk due to a shorter number of days between trade execution and settlement on the US markets

 

Yes - other markets such as London, Hong Kong Germany & the Australian market will remain on the trade plus 2 business-day (T+2) settlement cycle. Whereas the US market is transitioning to trade plus 1 business-day (T+1) settlement period. 

 

Moving to a trade plus 1 business-day settlement cycle for the US market introduces a 1-business day timing difference between markets aligned to a trade plus 2-business day settlement cycle. This means, if you have sold shares on a T+2 market, you will not be able to use these sale proceeds to fund a buy order on the US market on the same day. This is because the buy trade on the US market would settle before the sell trade on the T+2 market, leaving you with insufficient funds for settlement. So, you will either need to wait a day before placing the buy order on the US market to allow the funds from the sell trade to settle on the T+2 market or ensure you have sufficient funds in your Cash Account to cover the value of the buy order to be placed on the US market.

To make things easier, we will display the 1-business day settlement funds available for trade separately to your 2-business day settlement funds available for trade on the nabtrade website. This means if you are buying US shares, it is the 1 business-day settlement funds available for trade balance you need to be mindful of.

 

The nabtrade mobile app and IRESS Viewpoint will continue to display a single consolidated funds available for trade balance, so we recommend logging in to the nabtrade website to confirm your T+1 funds available for trade if you’re unsure. Please Note: your funds available for trade balance on nabtrade is comprised of your available cash balance, plus any unsettled balances you may have. 

No - the process on nabtrade to place an order remains the same. You will still need to have funds available for trading at the time of order placement and as such need to be aware of the different settlement timings if you are looking to place a buy on the US market using settlement funds from a T+2 market.

Yes - we have also aligned USD currency conversions to the new default settlement period of T+1.

Your funds available for trade balance consolidates your available cash holdings, as well as any unsettled funds. So, if you are receiving an ‘insufficient funds’ error message, it could be due to unsettled funds not being available in time to settle your new buy order.

Your funds available for trade balance consolidates your available cash holdings, as well as any unsettled funds. So, if you have placed a buy order and this has been rejected, it could be due to unsettled funds not being available in time to settle your new buy order. 

Important information

The nabtrade service (nabtrade) is the information, trading and settlement service provided by WealthHub Securities Limited (WSL) (ABN 83 089 718 249) (AFSL No. 230704). WSL is a Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited (ABN 12 004 044 937) (AFSL No. 230686) (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer. This material is intended to provide general advice only. It has been prepared without having regard to or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice. Past performance is not a reliable indicator of future performance. For more information, please click here.