Series 6: 8.1.1. Cash Accounts

8.1.1.  Cash Accounts

A plain vanilla brokerage account is a cash account. In a cash account, the investor must pay the full amount for the securities she purchases. Broker-dealers must pay for purchased securities by the regular way settlement date, and the securities cannot be sold again until payment has been made. Most securities transactions settle two business days after the trade date (T + 2). Treasury securities and liquidated options settle one business day after the trade (T+1). CDs and commercial paper settle on the trade date.

According to Regulation T, customers have two additional business days to pay (T + 4). If a customer does not come up with payment by the fourth business day after a trade, the broker-deal