Series 27: Default Or Regular Way Settlement

Default or Regular Way Settlement

For most securities, regular way settlement occurs two business days after the trade date (often noted as T + 2). These securities must be settled no later than T + 2 unless otherwise agreed to by the parties at the time of the transaction. Thus, if a trade is executed on Friday, June 1, the regular way settlement date will occur on Tuesday, June 5, and delivery and payment must occur on that date.

Regular way settlement for U.S. Treasuries and options is one business day after the trade date (T + 1).

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 (not surprisingly) same-day settlement. A cash settlement transaction must be finalized on or before 2:30 p.m. Eastern Time on the same day as the trade.