FINRA Rule 11320

Paragraph (a), For Cash, requires delivery on the day of the transaction itself. 

Paragraph (b), Regular Way, requires delivery on, but not before, the first business day following the transaction date — the current T+1 standard. 

Paragraph (c), Seller's Option, requires delivery on the date the option expires, with an early-delivery pathway subject to advance written notice. 

Paragraph (d), Buyer's Option, requires delivery on the date the option expires. 

Paragraph (e), Contracts Due on Holidays or Saturdays, provides that such contracts mature on the next business day. 

Paragraph (f), Delayed-Delivery, requires delivery on the date agreed upon at the time of the transaction. 

Paragraph (g), Prior to Delivery Date, addresses early tender of delivery under contracts executed pursuant to paragraphs (b), (d), and (h), giving the purchaser the election to accept or reject early delivery without prejudice to the purchaser's rights. And paragraph (h), Time and Place of Delivery, establishes the hours and location framework for delivery generally. FINRA Rule 11320 was most recently amended by SR-FINRA-2023-017 effective May 28, 2024 — the T+1 settlement cycle conformity amendment also examined in this dictionary's entries on FINRA Rules 11140, 11150, and 11210 — with a prior T+2-era amendment through SR-FINRA-2016-047 effective September 5, 2017, and an extensive earlier history dating to April 11, 1984. Four selected notices are associated — 84-44, 10-49, 17-19, and 24-04.

FINRA Rule 11320 sits within the 11300 Delivery of Securities subsection of the 11000 Uniform Practice Code, immediately following FINRA Rule 11310's book-entry settlement framework and immediately preceding FINRA Rule 11330's payment framework.

FINRA Rule 11320(a): "Cash" Transactions

FINRA Rule 11320(a) establishes the simplest and most immediate delivery timing — in connection with a transaction for cash, delivery shall be made at the office of the purchaser on the day of the transaction. 

This same-day delivery requirement for cash transactions directly explains the cash transactions exclusion that recurs throughout the Uniform Practice Code — FINRA Rule 11100(a) excludes cash transactions from the general scope provisions in certain respects, FINRA Rule 11140(a) excludes cash transactions from the ex-dividend, ex-rights, and ex-warrants framework, and FINRA Rule 11150(a) excludes cash transactions from the ex-interest framework for flat-traded bonds. 

Each of these exclusions makes sense precisely because FINRA Rule 11320(a) establishes that cash transactions settle on the same day they are executed — there is no gap between trade date and settlement date within which an ex-date determination could matter, since the transaction is, by definition, complete on the trade date itself.

FINRA Rule 11320(b): "Regular Way" Transactions and the Current T+1 Standard

FINRA Rule 11320(b) establishes the timing for the vast majority of ordinary securities transactions — in connection with a transaction regular way, delivery shall be made at the office of the purchaser on, but not before, the first business day following the date of the transaction. 

This is the current, post-May 28, 2024 standard reflecting the T+1 settlement cycle established by SEC Rules 15c6-1 and 15c6-2, as confirmed in Regulatory Notice 24-04 and discussed in this dictionary's entries on FINRA Rules 11140, 11150, and 11210.

The on, but not before formulation establishes both a floor and an anchor — delivery occurs on the first business day following the trade date, and not any earlier than that. 

The Versions tab confirmed for FINRA Rule 11320 shows three distinct versions: the period from December 15, 2010 through September 4, 2017 reflecting the pre-T+2 standard; the period from September 5, 2017 through May 27, 2024 reflecting the T+2 standard established through SR-FINRA-2016-047 and confirmed in Regulatory Notice 17-19; and the period from May 28, 2024 onwards reflecting the current T+1 standard. Under the T+2-era version, paragraph (b)'s regular way delivery would have occurred on the second business day following the transaction date rather than the first — confirming that FINRA Rule 11320(b)'s text has itself been the subject of the same settlement-cycle-driven amendments that this dictionary has traced throughout FINRA Rules 11140, 11150, and 11210, with the specific number of business days following the trade date shifting downward by one with each settlement cycle shortening.

Regular way is, in ordinary market usage, the default settlement convention applicable to the overwhelming majority of securities transactions absent any special instruction to the contrary — when no other delivery term such as cash, seller's option, buyer's option, or delayed-delivery is specified, regular way settlement under FINRA Rule 11320(b) is the operative default.

FINRA Rule 11320(c): "Seller's Option" Transactions

FINRA Rule 11320(c) addresses transactions in which the seller has been granted an option regarding the timing of delivery — in connection with a transaction seller's option, delivery shall be made at the office of the purchaser on the date on which the option expires. This establishes the outer boundary — the seller's option period has a defined expiration date, and absent earlier delivery, the seller must deliver by that expiration date.

The paragraph then establishes an important early-delivery pathway — except that delivery may be made by the seller on any business day after the first business day following the date of transaction and prior to the expiration of the option, provided the seller delivers at the office of purchaser, on a business day preceding the day of delivery, written notice of intention to deliver. This exception gives the seller's option transaction its defining flexibility — while regular way delivery under paragraph (b) occurs precisely on the first business day following the transaction date, a seller's option transaction allows the seller to choose any business day within the option period — from the day after what would be the regular way delivery date through the option's expiration date — as the actual delivery date, provided the seller gives the purchaser advance written notice of intention to deliver on a business day preceding the chosen delivery day.

This advance-notice requirement serves an important coordination function — without it, a purchaser would have no way of knowing on which of potentially many possible business days within the option period the seller might choose to deliver, making it difficult for the purchaser to ensure funds and personnel are available to receive delivery and tender payment. The written notice of intention to deliver requirement ensures the purchaser has at least one business day's advance notice of the seller's chosen delivery date, allowing the purchaser to prepare accordingly.

FINRA Rule 11320(d): "Buyer's Option" Transactions

FINRA Rule 11320(d) addresses the converse of paragraph (c) — in connection with a transaction buyer's option, delivery shall be made at the office of the purchaser on the date on which the option expires. Unlike paragraph (c)'s seller's option framework, paragraph (d) does not include any early-delivery exception analogous to paragraph (c)'s except that clause — for a buyer's option transaction, delivery occurs on the date the option expires, full stop, without the seller having any unilateral right to deliver earlier upon notice.

This asymmetry between paragraphs (c) and (d) reflects the different party in control of the timing decision in each contract type. In a seller's option transaction, the seller controls the timing within the option period, and paragraph (c)'s exception accommodates the seller's potential desire to deliver earlier than the option's expiration, subject to the advance-notice requirement protecting the purchaser's ability to prepare for receipt. In a buyer's option transaction, by contrast, it is the buyer — not the seller — who holds the option, and paragraph (d) does not grant the seller any corresponding right to accelerate delivery before the buyer's option expires, since doing so would interfere with the very option the buyer's option contract is designed to give the buyer.

FINRA Rule 11320(e): Contracts Due on Holidays or Saturdays

FINRA Rule 11320(e) provides the universal business-day adjustment rule — contracts due on a day other than a business day shall mature on the next business day. This brief provision ensures that none of the delivery date determinations established by FINRA Rule 11320's other paragraphs can produce an operative delivery obligation falling on a day when the relevant offices and settlement infrastructure are not open for business — a contract that would otherwise be due on a Saturday, Sunday, or holiday simply matures on the next business day instead, a straightforward and universally applicable adjustment that avoids the need for each of paragraphs (a) through (d), (f), and (h) to separately address non-business-day scenarios within their own text.

FINRA Rule 11320(f): "Delayed-Delivery" Transactions

FINRA Rule 11320(f) addresses transactions whose delivery timing is established by direct agreement between the parties rather than by any of the standardized conventions of paragraphs (a) through (e) — in connection with a transaction made for delayed-delivery, delivery shall be at the office of the purchaser on the date agreed upon at the time of the transaction.

The delayed-delivery contract type represents the most flexible of FINRA Rule 11320's delivery timing categories — rather than fitting the transaction into one of the standardized cash, regular way, seller's option, or buyer's option frameworks, the parties simply agree at the time of the transaction on whatever specific delivery date they wish, and that agreed-upon date governs. This flexibility makes delayed-delivery transactions a useful tool for situations where neither party's needs are well served by the standardized timing conventions — for example, where both parties anticipate a specific future date on which delivery would be operationally convenient for reasons unrelated to the standard settlement cycle.

FINRA Rule 11320(g): Prior to Delivery Date — Early Tender and the Purchaser's Election

FINRA Rule 11320(g) addresses what happens when a seller tenders delivery before the time established under the relevant contract type — if in contracts executed pursuant to paragraphs (b), (d) and (h) of this Rule, the seller tenders delivery before the stated time, acceptance shall be at the election of the purchaser, and rejection of such delivery by the purchaser shall be without prejudice to his rights.

This provision establishes that for contracts governed by paragraph (b)'s regular way framework, paragraph (d)'s buyer's option framework, or paragraph (h)'s general time-and-place framework — but notably not paragraph (c)'s seller's option framework, which already has its own specific early-delivery mechanism with its own advance-notice requirement, nor paragraphs (a), (e), or (f), which either involve same-day delivery, business-day adjustment, or agreed-upon delivery dates that do not present the same early-tender scenario — an early tender by the seller does not bind the purchaser to accept it. The purchaser may elect either to accept the early-tendered delivery or to reject it, and critically, rejection of an early tender does not prejudice the purchaser's rights under the contract — the purchaser remains entitled to receive delivery at the originally contracted time, notwithstanding having rejected the seller's early tender.

This without prejudice to his rights protection is significant — it ensures that a seller cannot use early tender as a tactic to shift risk or create operational pressure on the purchaser, since the purchaser's rejection of an unwanted early tender leaves the purchaser's contractual position entirely intact, with the seller remaining obligated to deliver at the proper time under the applicable paragraph.

FINRA Rule 11320(h): Time and Place of Delivery

FINRA Rule 11320(h) establishes the general framework for where and during what hours delivery must occur — delivery shall be made at the office of the purchaser between the hours established by rule or practice in the community where such office is located. This community-hours standard ties the permissible delivery window to local custom and practice — rather than establishing a single nationwide delivery-hours standard, FINRA Rule 11320(h) defers to whatever hours are established by rule or practice in the specific community where the purchaser's office is located, accommodating the reality that business hours and settlement-related operational practices may vary somewhat across different geographic markets.

The second sentence addresses multi-office purchasers — if the purchaser maintains more than one office, delivery shall be made at the office with which the transaction was effected, unless delivery instructions are provided at the time of the transaction. This default-to-the-transacting-office rule, subject to override by specific delivery instructions provided at the time of the transaction, ensures that a seller delivering to a purchaser with multiple office locations has a clear default destination — the specific office through which the transaction was effected — while preserving the purchaser's ability to direct delivery to a different office when operationally appropriate, provided that direction is given at the time of the transaction rather than sprung on the seller later.

The Settlement Cycle Amendment History: T+2 Through T+1

FINRA Rule 11320's amendment history — an amendment effective April 11, 1984, SR-NASD-91-13 effective November 1, 1991, SR-NASD-94-56 effective June 7, 1995, SR-FINRA-2010-030 effective December 15, 2010, SR-FINRA-2016-047 effective September 5, 2017, and SR-FINRA-2023-017 effective May 28, 2024 — places FINRA Rule 11320 squarely within the family of settlement-cycle-dependent Uniform Practice Code provisions this dictionary has traced through FINRA Rules 11140, 11150, and 11210. The confirmed Versions tab — showing the December 15, 2010 through September 4, 2017 version, the September 5, 2017 through May 27, 2024 version, and the May 28, 2024 onwards version — confirms that paragraph (b)'s regular way delivery timing has shifted with each settlement cycle transition, from a T+2-era second-business-day standard to the current T+1-era first-business-day standard, mirroring the identical pattern this dictionary has observed in FINRA Rule 11140(b)(1)'s ex-dividend date formula and FINRA Rule 11150(a)(1)'s ex-interest date formula.

Connection to FINRA Rules 11100, 11140, 11150, 11210, 11220, 11310, and 11330

FINRA Rule 11320 connects to FINRA Rule 11100(a) and FINRA Rules 11140(a) and 11150(a) — whose cash transactions exclusions are directly explained by FINRA Rule 11320(a)'s same-day delivery requirement for cash transactions. It connects to FINRA Rule 11210 and FINRA Rule 11220 — whose comparison, confirmation, and description-of-securities requirements must capture which of FINRA Rule 11320's eight delivery-timing categories governs a given transaction, ensuring both parties agree on when delivery is due. It connects to FINRA Rule 11310 — whose book-entry settlement mechanism operates in coordination with the delivery timing FINRA Rule 11320 establishes, with FINRA Rule 11310(g)'s cut-off-time and cut-off-date exclusions interacting directly with the specific delivery dates FINRA Rule 11320's paragraphs produce for a given transaction. And it connects to FINRA Rule 11330 — the next rule in the FINRA Rule 11300 subsection, whose payment framework operates as the counterpart obligation to the delivery timing FINRA Rule 11320 establishes, since payment and delivery together constitute the two halves of settlement.

Examination Relevance and Key Takeaways

FINRA Rule 11320 is tested on the Series 7 and Series 24 examinations as the comprehensive dates-of-delivery framework — establishing when delivery must occur across every major Uniform Practice Code contract type, with paragraph (b)'s regular way standard having been amended repeatedly to track the industry's progressive shortening of the standard settlement cycle to T+1.

The key points to retain are these: FINRA Rule 11320(a) requires same-day delivery for cash transactions; FINRA Rule 11320(b) — as amended effective May 28, 2024 to conform to the T+1 settlement cycle — requires regular way delivery on, but not before, the first business day following the transaction date, a one-business-day-earlier standard than the prior T+2-era second-business-day rule confirmed in Regulatory Notice 17-19; FINRA Rule 11320(c) requires seller's option delivery on the option's expiration date, with an early-delivery exception permitting the seller to deliver on any business day after the regular way delivery date and before expiration, provided one business day's advance written notice of intention to deliver; FINRA Rule 11320(d) requires buyer's option delivery on the option's expiration date with no corresponding early-delivery exception for the seller; FINRA Rule 11320(e) provides that contracts due on a non-business day mature on the next business day; FINRA Rule 11320(f) requires delayed-delivery transactions to settle on the date the parties agreed upon at the time of the transaction; FINRA Rule 11320(g) provides that for contracts under paragraphs (b), (d), and (h), early tender by the seller is subject to the purchaser's election to accept or reject, with rejection being without prejudice to the purchaser's rights; FINRA Rule 11320(h) establishes that delivery occurs at the purchaser's office during hours established by local rule or practice, defaulting to the transacting office for multi-office purchasers absent contrary delivery instructions given at the time of the transaction; and the rule was last amended effective May 28, 2024 through SR-FINRA-2023-017, with prior amendments effective April 11, 1984, November 1, 1991 through SR-NASD-91-13, June 7, 1995 through SR-NASD-94-56, December 15, 2010 through SR-FINRA-2010-030, and September 5, 2017 through SR-FINRA-2016-047, with four selected notices — 84-44, 10-49, 17-19, and 24-04.