Section: 7 Trading on Exchanges
Sub Section: 7 Settlement
In most stock exchanges of developed economies, an order executed on the exchange
must be settled within three working days. This requirement is often referred
to as the T + 3 system of settlement i.e. trade plus three working days. The purchaser
must deliver the cash to his broker, and the seller must deliver the stock to
the broker, who in turn delivers it to the buyer's broker. In some exchanges,
settlements are made through T + 5 or T + 7 system.