Series 26: Different Types Of Settlement Dates

Different Types of Settlement Dates

While most transactions are settled by regular way settlement, orders may be submitted with non-regular way settlement instructions. Non-regular way settlement must clearly be specified on the confirmation ticket. Settlement instructions will identify the settlement period and the type of settlement to be applied.

In cases where a transaction is settled in cash, delivery and payment are exchanged on the same day of the trade. This is also called same-day settlement. A cash settlement transaction must be finalized no later than 2:30 p.m. ET.

If the seller cannot deliver the securities by the regular way settlement date, the seller can ask for a seller’s option. If the buyer consents, a seller’s option will allow the seller to deliver the securities on a later date. If the seller wants to make a delivery prior to the option date, it must wait until at least three business days after the tra