Settlement (T+2)
Settlement is the process of finalising a trade by transferring the shares and cash. In Australia this takes two business days.
Quick reference:
Standard: T+2 (Trade date + 2 business days). Buyer: Receives the shares. Seller: Receives the cash.
Key: Trade isn’t complete until settlement.
Expanded explanation:
When you buy or sell a share, the trade is agreed instantly, but the official transfer of ownership happens later. On the ASX, the rule is T+2. If you trade on Monday, the transfer is complete on Wednesday.
For buyers, this means you don’t officially own the shares until settlement. For sellers, it means you don’t have access to the cash until the process is complete. Settlement keeps the system fair and organised so both sides of the trade are honoured.
Related links + Articles:
• ASX.
• Broker.