From May 28th 2024, upon selling EU shares or ETFs you will notice that your cash proceeds from the sale are shown as ‘Reserved cash’, this is until the afternoon of next business day when it then becomes ‘Available cash’ and can be used to place new buy orders. If you’re wanting to re-invest straight away we recommend that you always keep sufficient cash balance on your account to do so.
This change will be temporary as we’re already working on a technical solution allowing you to use proceedings from EU securities to purchase EU securities on the same day. We’ll keep you posted on this.
Why is this?
On May 28, 2024, an important change is occurring with the settlement cycle in the U.S. securities market. The settlement cycle for the purchase and sale of a stock in the U.S. market is being expedited from T+2 (Transaction day + 2 business days) to T+1 (Transaction day + 1 business day). This means that you become the rightful owner of the US stock 1 day after purchase instead of 2 days after. The same goes for selling a US stock. However, European markets are not yet joining this change to T+1, and BUX had to implement changes to adhere to the new settlement cycle. So, now when you sell an EU asset we have to reserve the cash proceeds for 1 business day. This essentially prevents you from spending the money on US shares that require settlement on T+1 (your proceeds from European sales settle on T+2).
Where can I see my ‘Reserved cash’?
When in your portfolio screen, select ‘Account value’, then tap on ‘Cash’ to expand the view. You will now see your ‘Available cash’ and ‘Reserved cash’.