T+3 is a shorthand for trade date plus three days indicating when securities transactions must be settled. T+3 means that when a security is purchased, payment and the securities certificate must change hands no later than three business days after the trade is executed.


The three-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.

In contrast to T+3, government securities, stock options, and options on futures contracts settle on the next business day following the trade. Futures contracts themselves settle the day of the trade.

The first day of the three-day settlement cycle starts on the business day following the day that a security was purchased or sold. For example, if a stock is purchased on Friday at any time during the day, Saturday and Sunday are not considered business days, so the three-day clock doesn't start running until Monday. A payment or check must arrive at the broker's office by the close of business on Wednesday.[1]


Efforts are currently underway in Europe to shorten the settlement cycle to two days ("T+2"), driven by the European Commission's Central Securities Depositories Regulation.[2] Discussions have begun in the United States to follow suit, propelled in part by cost-benefit analysis research commissioned by the Depository Trust & Clearing Corporation in 2012.[3] The study, conducted by the Boston Consulting Group, identified 11 key enablers to achieving shortened settlement cycles, including the establishment of a "trade date" environment, or a market where same-day affirmation (SDA) is the norm.[4]


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  3. Mehta, Nina (22 May 2012). "DTCC Plans Study on Faster Settlement for U.S. Securities." Bloomberg News. Retrieved 22 March 2013.
  4. Chandrashekhar, Chandy; Antonio Riera, Shubh Saumya, and Roland Kastoun (October 2012). "Cost Benefit Analysis of Shortening the Settlement Cycle." Boston Consulting Group. Retrieved 22 March 2013.

12px This article incorporates public domain material from the United States Government document "About Settling Trades in Three Days, United States Securities and Exchange Commission".

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