what is T+2 or T+3 days settlement in share trading?

T+2 or T+3 days settlement - Sulthan Academy

Indian and European capital markets follows T+2 Rolling Settlement whereas countries like South Africa and United States follows T+3 settlement.

  • T is the transaction date
  • ‘+2’ or ‘+3’ denotes the number of days for settlement

Thus, trades done on Monday are settled 2 working days later viz. Wednesday and In case of T+3 days, settlement is made after 3 working days i.e. on Thursday.

All transactions executed on the stock exchanges are to be settled through the Clearing Corporation/House of the stock exchanges. However, the following exceptions are provided:

  • Total connectivity failure to the exchange/STP (Specific connectivity issues of the custodians and members are not to be considered as valid exceptions).
  • International Holidays that may be decided upfront by the stock exchanges in consultation with the custodians.
  • Closing down of national/international centres due to calamities.

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