Clearing & Settlement
After a trade, the shares and cash still have to change hands. Clearing and settlement make sure they do, even if one side fails. Here is how the process works and why U.S. stocks now settle in one business day.
After the click
| Step | What happens |
|---|---|
| Trade | Your order is matched on an exchange or other venue |
| Clearing | A central clearinghouse confirms details and steps between buyer and seller |
| Settlement | Shares move to the buyer and cash to the seller |
| Custody | Your broker holds the shares in its account at a central depository |
The U.S. post-trade process for stocks.
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