Securities transactions undergo three stages. The first stage is called as trading. Trading means buying and selling the security which an investor perceives is the best buy or sell according to his analysis. At the time of trading an investor places, the order at a given price either to buy or sell a security. When the order gets executed, it means that trading has been done successfully. Trading in stock exchanges on equity shares is done price time priority basis while trading on debt instruments is done on yield time priority basis. This effectively means that for an equity share highest price gets the first priority when an investor places order to purchase a share and lowest price gets the first priority when an investor wants to sell the shares.

After trading is done, comes the process of clearing and settlement of securities. Clearing is a process which identifies the open position on an investor, which effectively means that through the process of clearing obligation of an investor, is identified. Obligation shows the amount of securities/money an investor is expected to pay/receive.

After the obligation has been identified through the process of clearing, the settlement is done. Settlement means end of the transaction cycle. The investor who is expected to receive shares, receives the same in settlement. Similarly an investor who is supposed to pay an amount, pays the amount at the time of settlement.

The list below indicates the settlement cycle across the world.

Country Instruments Traded | Settlement Cycle | Settlement System

Australia Equity : T+3 : CHESS
Australia Bonds : T+3 : Austraclear
Brazil Equity : T+3 : CBLC
Brazil Corporate Debt : T+1 : CETIP
Brazil Government Debt : T+0 : SELIC
France Equities and Bonds : T+3 : Euroclear France
Germany Equities and Bonds : T+3 : Clearstream Banking Franfurt
Hong Kong Equity : T+2 : HKSCC
Hong Kong Debt : T+2 : CMU
India Equity and debt : T+2 : NSDL or CDSL
India Government Debt : T+2 : RBI
South Korea Equity : T+2 : JASDEC
South Korea Debt : T+0 : Bank of Japan
UK Equity and Corporate Debt : T+3 : CREST
UK Gilts : T+1 : CREST
USA Equity and Corporate Debt : T+3 : DTC
USA Government Debt : T+3 : Federal Reserve

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