Settlement Period

A settlement period is the time frame in which the transfer of Securities and funds occurs following a trade. It typically refers to the time from the execution of a trade until the buyer receives the Securities and the seller receives the payment.

For example, in the Stock market, a common settlement period is T+2, meaning that the trade is settled two Business Days after the transaction date. If a trade is executed on a Monday, the settlement would occur by Wednesday.

In the case of bond trades, the settlement period might be T+1, meaning the transaction is settled one Business Day after the trade date. So, if a bond trade occurs on a Tuesday, the settlement would be completed by Wednesday.

Different types of Securities may have varying settlement periods based on the market conventions and regulatory requirements.