After an investor buys or sells a security, the process isn’t finished immediately. The trade must be cleared and settled.

 

1️⃣ Trade Date (T)

📌 Short Description: The day the buy or sell transaction is executed.

🌟 Golden Point: T = Trade happens today. The buyer and seller agree to the transaction, but settlement occurs later.

🔑 Think: Trade Executed = T 📈

 

2️⃣ Settlement Date (T+1)

📌 Short Description: The day when payment and securities are exchanged to complete the transaction.

🌟 Golden Point: Most Canadian stocks and bonds settle on T+1 → one business day after the trade date.

🔑 Think: Trade Today → Settle Next Business Day 📅

 

3️⃣ CDS — Canadian Depository for Securities

📌 Short Description: Provides clearing, settlement, and depository services for securities such as stocks and bonds.

🌟 Golden Point: When the question involves clearing and settling stocks or bonds, think CDS.

🔑 Think: Stocks & Bonds → CDS 📊

 

4️⃣ CDCC — Canadian Derivatives Clearing Corporation

📌 Short Description: Provides clearing services for exchange-traded derivatives and certain other products.

🌟 Golden Point: When the question involves clearing derivatives, think CDCC.

🔑 Think: Derivatives → CDCC 📑

 

🌟 Golden Exam Rule:

T → Transaction Happens 📈

T+1 → Transaction Settles 💵

CDS → Stocks & Bonds 📊

CDCC → Derivatives 📑