Keep in mind that if an equity option is ultimately exercised, it involves the purchase and sale of a corporate security and, therefore, the stock transaction settles T + 2. In a municipal bond transaction, “T + 2” indicates that: The bond trades with a 2-point premium B. The bond trades with an additional takedown of 2 points C. T+1 (T+2,T+3): Abbreviations that refer to the settlement date of security transactions. The T stands for transaction date, which is the day the transaction takes place. The numbers 1, 2 or 3 According to industry standards, most securities have a settlement date that occurs on trade date plus 2 business days (T+2). That means that if you buy a stock on a Monday, settlement date would be Wednesday. Enhanced global settlement harmonization - the transition to a T+2 settlement cycle will align the U.S. and Canadian markets with other major international markets in Europe and Asia that currently operate in a T+2 environment. The move to T+2 settlement was inevitable – with the advent of technology, stock exchanges around the world and the financial services industry have grown tremendously. The shortened settlement cycle benefits capital markets because investors can trade faster and reduce their trading and margin costs. For example, if an investor were to sell a stock on a Friday, the funds would not actually be settled until Wednesday of the following week. For a variety of reasons, the DTCC has shortened this settlement from the three business days to two business days (T+2). Let us see the implications of this change.
The T+2 settlement cycle, as mandated by the Securities and Exchange Commission (SEC), began on Tuesday, September 5, 2017. So, if you sold stock on that Tuesday, you’d receive the cash in your account by Thursday. T+2 is jargon for the “transaction date” plus “2 consecutive business days”. The current American settlement date is written as T+2. T stands for the trade date, and the 2 represents 2 business days later. (Notice that this is business days, and not days.) The older system can be expressed as T+3 or T+5, etc. Foreign Markets Some foreign countries have transitioned to T+2 as well.
Important Notices. SGX launches new securities settlement and depository system, T+2 securities settlement cycle from 10 December. Singapore Exchange
27 Sep 2017 In North America, for instance, securities markets have recently switched from T+ 3 to T+2 settlement. Before, if you sold a stock the cash would
Implementation of Shortening of Stock Settlement Cycle (T+2) As a result of the successful migration rehearsal test of today amongst market infrastructures and participants, the T+2 will be implemented on July 16, 2019 (Tue.) (trade date basis) as scheduled. 18 July 2018 Implementation of Stock Exchange Transaction Settlement Acceleration from T+3 to T+2. Jakarta Ð The advancement of technology and the growth of practice implemented by other Exchanges in the world recommend the capital market development by shortening the Stock Exchange transaction settlement cycle to T+2.