Changes from 7 March 2016 by the Australian Stock Exchange (ASX) will reduce the current settlement period from 3 days to 2 days. This means settlements that trade will be required to occur two business days after the day a trade takes place. This settlement period will be called T+2 (trade date plus 2 business days).
The change will affect all financial products traded on a securities market in Australia, including shares, units, bonds, hybrids, CDIs, exchange-traded Australian Government Bonds, exchange-traded products (including exchange-traded funds), warrants and instalments.
As a result of this change, the ASX has indicated that cheques may no longer be accepted for settlements as the length of time required to clear the funds may exceed the settlement period. Your broker may suggest the use of electronic funds transfer (EFT) or direct debit, BPay or a cash management account.
You can read more information about these changes in the ASX’s Transition to T+2 settlement brochure.