The stock market is speeding things up! Starting Tuesday, May 28, the world of stock trading will enter a new era with the implementation of the ‘T+1’ settlement cycle. This shift means transactions will now finalize in just a single day post-trade, cutting the current wait time in half, as reported by Bloomberg.

In the realm of stock trading, there’s typically a scramble following a ‘trade date’—i.e. the day you decide to buy or sell a stock—when all parties involved hustle to align their ducks (or dollars and stocks) in a row. This phase culminates in what’s known as the ‘settlement date,’ once the deal is sealed and everyone can breathe a sigh of relief.

Pre-2017, the U.S. markets worked on a T+3 settlement cycle. This meant that after trading a stock, you could potentially wait three whole days for the transaction to finalize. The Securities and Exchange Commission (SEC) later trimmed that down to T+2 and now, thanks to advancements in technology, we’re moving to 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,” SEC Chair Gary Gensler said in a statement issued last week. Shortening the settlement cycle also will help the markets because time is money and time is risk”

This swifter cycle isn’t just a U.S. fad. Shortly after the SEC decided to adopt T+1 in February 2023, Canada and Mexico jumped on the bandwagon, planning to implement the same from May 27, 2024, onward.

Why the rush? Shorter settlement times mean fewer days spent chewing your nails wondering if something will go wrong. It reduces risks like counterparty flaking or operational hiccups, and it helps investors and brokers manage liquidity and exposure more effectively. For the average investor, though, this change is nearly invisible—most of the heavy lifting is handled by their brokers. They’ll ensure that funds are ready a day earlier without you needing to lift a finger, though it might be wise to peek at the fine print occasionally.

“Hopefully, we’ll start to see the benefit that we expect to see which is the reduction in risk, a reduction in margin or collateral, and we’re hoping that this happens without serious impact to settlement rates,” RJ Rondini, director of securities operations at the Investment Company Institute, told Reuters.

For those who like to cut it fine with Automated Clearing House (ACH) payments, remember you’ll need to initiate these a day earlier. This also means less wiggle room to fix any slip-ups, like pesky cost-basis errors.

For the few still clutching their physical stock certificates, you’ll need to be even quicker off the mark, ready to deliver these a day earlier upon selling. But let’s be honest, paper certificates are about as common these days as a dial-up modem.

So, strap in and prepare for faster financial exchanges that promise to make trading smoother, though possibly at the expense of a little more nail-biting during the shorter transaction windows.