Several years ago there was talk about changing to T+1. What ever happened to that? It seems like it would be in brokers best interest to allow small cash accounts to reuse funds on T+1 as opposed to T+3.
well, T+3 is a good thing from my experience. I come from a mutual fund & ETF background. Funds settle T+1 in the secondary market (when you & I buy) and many/most of the securities that we buy settle T+3 on the exposure/fund management side. If you buy into an ETF tomorrow your cash will be received by the fund on Tuesday... Tomorrow or Tuesday the Fund will go out and get your exposure, with your cash - except those trades settle T+3 so the fund uses your money to fund your exposure. If life were 100% T+3 we would have to go out and borrow money often because of rejected trades, failures, errors, etc. and financing rates would go up and be eventually passed on to you - the shareholder.