What is the settlement period?
A share trade is like any other transaction with a buyer and a seller. When you sell your shares someone else is in effect buying them from you, conversely when you buy shares you are in effect purchasing them from someone else. These transactions are conducted through the “market makers” or RSPs who match up buyers and sellers.
The settlement date is when your transaction completes and the stock and cash change hands. This is normally 3 working days after the day you placed the trade (T+3).
This means that if you place a trade to buy stock you must deliver the payment for it by the settlement date. If you sell stock then it must be delivered to the buyer on the settlement date and you will receive payment.
Certificated Trades
For certificated sales your share certificate and signed Crest Transfer Form must be received prior to the settlement date so that the stock can be delivered to the buyer.
Certificated sales are placed on a T+10 basis to give you time to deliver your certificates and a Crest Transfer Form. To ensure the prompt settlement of certificated trades you should make sure your documentation is received three working days prior to your settlement date.
Certificated purchases settle after 10 days, however it can take some time longer for a share certificate to be produced.
Extended Settlement
You can choose to settle purchases up to T+20. On accounts with trading levels this means that you can choose to pay for your stock up to 20 working days after the purchase date.
Extended settlement is considered anything over the standard market settlement (T+3) Please be aware that the market may charge a premium on extended settlements.
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