BU223 Lecture Notes - Lecture 8: Beneficial Ownership, Personal Bankruptcy, Prime Rate
Document Summary
Notes - viii-c - 1: the purchase of a stock or bond. In a cash account, full payment for the securities is required on or before the. The settlement date is the day on which beneficial ownership is transferred from the seller to the buyer. Monday, it had to be paid for on the following monday (assuming that there are no intervening holidays). Note that this explains why december 22, 1971 and not december. 31, 1971 is the valuation day for capital gains prior to 1972. 1995, common stock settlement was changed to three business days: the rule is commonly referred to as t+3, where the t refers to the transaction day; prior to june 1, 1995, the settlement procedure was referred to as t+5. Note that this means that in some cases, settlement will now take place in the same week as the transaction, (monday and. Tuesday transactions), while under the old rules, settlement always involved an intervening weekend.
