Categories: Investor Definitions

SETTLING SECURITIES TRANSACTIONS, T+2

Investors must complete or “settle” their security transactions within two business days. This settlement cycle is known as “T+2,” shorthand for “trade date plus two days.” 

T+2 means that when you buy a security, your payment must be received by your brokerage firm no later than two business days after the trade is executed. When you sell a security, you must deliver to your brokerage firm your securities certificate no later than two business days after the sale. 

The two-day settlement date applies to most security transactions, including stocks, bonds, municipal securities, mutual funds traded through a brokerage firm, and limited partnerships that trade on an exchange. Government securities and stock options settle on the next business day following the trade. 

Click here to read our Investor Bulletin: New “T+2” Settlement Cycle – What Investors Need to Know.

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