Clearance & Settlement
The process of completing an order is called clearance and settlement. By law, the final transfer of stock ownership must be completed within two business days of the trade. The transfer happens in three steps. First, the number of shares bought and sold is confirmed to be the same. Second, the seller must be credited with payment from money that is transferred out of the buyer's account. Third, the shares must be transferred from seller to buyer.
The following chart shows the settlement dates for common investment products. 'T' represents the trade date, and '+ 1' and '+ 2' mean plus one business day and plus two market days, respectively. For example, a municipal bond purchased on Monday, March 16, would settle on Wednesday, March 18.