Guide
T+1 Settlement Explained: Which Markets Settle Next Day
When you buy a share, the trade is agreed in a fraction of a second, but the actual exchange of cash and shares happens later. That later moment is called settlement, and the number of business days it takes is written as T+1, T+2 and so on, where T is the trade date.
Why settlement time matters
Until a trade settles, both sides carry a small risk that the other side fails to deliver. Brokers and clearing houses hold collateral against that risk. A shorter cycle means less time at risk and less collateral, which is why regulators have been shortening it step by step. In the 1990s many markets still settled after three to five days.
For an investor, settlement decides when the cash from a sale is really yours and when shares you bought are formally registered in your name.
Which markets settle on T+1 today
| Market | Exchanges | Cycle | Since or planned |
|---|---|---|---|
| United States | NYSE, Nasdaq | T+1 | 28 May 2024 |
| Canada | TSX | T+1 | 27 May 2024 |
| India | NSE, BSE | T+1 | Completed in January 2023 |
| Mainland China | SSE, SZSE | Shares on T, cash on T+1 | Long-standing |
| European Union | Euronext, Xetra, Nasdaq Stockholm and others | T+2, moving to T+1 | Planned 11 October 2027 |
| United Kingdom | LSE | T+2, moving to T+1 | Planned 11 October 2027 |
| Switzerland | SIX | T+2, moving to T+1 | Planned with the EU |
| Japan, Hong Kong, South Korea, Taiwan, Australia, Singapore | TSE, HKEX, KRX, TWSE, ASX, SGX | T+2 | — |
India went further than most: besides T+1, it offers an optional same-day (T+0) settlement cycle for a limited list of shares. Mainland China has a different rule that matters more for traders: shares bought on the Shanghai or Shenzhen exchanges cannot be sold again on the same day.
The 2027 change in Europe
The European Union harmonised settlement at T+2 in 2014. It now plans to move to T+1 on 11 October 2027, and the UK has chosen the same date. Switzerland intends to move together with them. Doing it on one day matters because many European shares, bonds and funds trade across borders, and a split would leave investors with mismatched cash flows.
Our market updates will post a reminder in the months before the switch, and the holiday calendar lists the date under upcoming rule changes.
What T+1 changes for you
- Cash from sales arrives sooner. In a T+1 market, money from a sale on Monday settles on Tuesday instead of Wednesday.
- Ex-dividend dates move. To receive a dividend, you must own the share on the record date. In the US the ex-dividend date and the record date are now the same business day, because a purchase on that day settles only after the record date.
- Holidays count. Settlement counts business days of the settlement system. A trade on the day before a holiday settles after the holiday. Check the holiday calendar when timing matters.
Cross-border trades and currencies
Different cycles can catch out investors who move money between markets. Until the European switch, if you sell a German share (T+2) to buy a US share (T+1) on the same day, the purchase settles a day before the cash from the sale arrives. Many brokers bridge that gap, but some ask you to have the cash ready.
Currency is a second issue. Standard foreign exchange trades settle two business days after the deal. When you buy a US share in euros on a T+1 market, your broker has to arrange the currency a day earlier or pre-fund it. This is mostly handled behind the scenes, but it can show up in the exchange rate or fees you pay.
The short version
- T+1 means one business day between trade and settlement.
- North America and India are already there; Europe, the UK and Switzerland plan to follow on 11 October 2027.
- Most of Asia-Pacific settles on T+2.
- Settlement affects dividend entitlement and when your cash is available, not when you can place your next order.
Sources
- U.S. Securities and Exchange Commission
- European Securities and Markets Authority
- Financial Conduct Authority
- SEBI
This guide explains how markets work; it is not investment advice. Check current rules with the exchange or your broker.