Settlement date is asecurities industry term describing thedate on which atrade (bonds, equities, foreign exchange, commodities, etc.)settles. That is, the actual day on which transfer of cash or assets is completed and is usually a few days after the trade was done. The number of days betweentrade date and settlement date depends on the security and the convention in the market it was traded. For example, when settling a share transaction on theLondon Stock Exchange, this is set attrade date + 2 business days.[1] In the United States, the transfer period was changed from 3 to 2 days in 2017 and to 1 day in 2024.[2]
It is not necessarily the same asvalue date (when the settlementamount is calculated). For instance, theback office may require a few days to makepayment. This gap (between valuation and settlement) is often written into the financialcontract, although the actual settlement date can also differ from that originally specified because of problems or errors.
It is occasionally referred to as "contractual settlement date".