Are DRIPs subject to a settlement period (e.g. T+2)?
Does the answer depend on whether the dividend reinvestment accounts for complete shares vs only fractional shares?
Are there any time limitations on when they can be traded in a cash (non-margin) account? (e.g. with regards to Regulation T, 12 CFR 220.8) As I understand it, in the case of a dividend, the cash should necessarily be in the account when the trade occurs.
There are two aspects to a DRIP account: 1) Reinvested dividends 2) New cash being reinvested (if available)
You mentioned cash from a dividend being in the account and Regulation T, 12 CFR 220.8 and that confuses me since it appears that you may be referring to (1) and (2). So let me paint some broad strokes.
DRIP plans can be administered differently so there's no one size, fits all answer. In general, DRIPs take all of the dividends and cash to be reinvested and make a lump sum purchase all at once and then distribute the shares accordingly to each account. This can be done once a month (or more). Once the shares hit your account, they are yours to do with as you please unless there is any kind of restriction per the particular DRIP (I have never come across one).
The best way to get the correct answer is to read the DRIP prospectus or contact the administrator to determine how (1) and (2) are managed.
