Settlements: Overdue Payments

What is Settlement?

Settlement refers to the process of exchanging ownership of shares for money. When settlement occurs, you pay for shares you have purchased, or receive a payment for shares you have sold.

Settlement takes place 2 business days after your trade has executed (T+2). When purchasing shares, we will debit your nominated settlement account for the amount purchased including brokerage*. You can find the exact amount on your confirmation note. When selling shares, we will credit your nominated settlement account for the sale amount less brokerage.

Settlement Overdue Illustration

Settlement process

When you purchase shares, part of your settlement obligation is to ensure that you have sufficient funds in your settlement account before the settlement day (T+2) as outlined in our Westpac Securities Terms and Conditions.

  T  

Friday

T = The day of the trade

Once an order executes a confirmation will be sent to you via email or post.

Confirmations will specify settlement date and settlement amounts for all types of orders.

T+1

Monday

T+1 = First business day after the trade executes

Check your estimated settlements calculator located on the homepage to view any upcoming settlements.

T+2

Tuesday

T+2 = Second business day indicates Settlement day

For Buys: Funds will be debited by 8:00am on the day

For Sells: Funds will be credited on the day

To track and check the final status of your order use Manage Orders.

Trades placed on a Friday will follow the T+2 settlement cycle as per usual. The weekends and public holidays are not included in the day count.

This means Friday = T, Monday = T+1 and Tuesday = T+2.

Trades will generally follow the normal settlement process except for when contra is applied to T+2. Find more information on how contra can affect your trades.

* Confirmations are also known as ‘contract notes’.

Missed a trade settlement?

When you miss a settlement payment, we will notify you via SMS and email on T+4. The notifications will include details on the overdue amount and inform you about payment due dates.

Settle your outstanding balance through the following:

  • Deposit sufficient funds into your nominated bank account
  • Sell enough shares to cover the outstanding amount

Confirmations help you stay updated with any upcoming settlements. You receive a confirmation after each trade has successfully executed.

To find a record of all confirmations, go to Trading > Share Orders > Confirmations and select the account you wish to view from the drop-down list.

What are the implications for an overdue settlement?

An overdue settlement occurs when your settlement obligations are not met. This can happen due to having insufficient funds or an invalid bank account linked for settlement.

If we are unable to debit the required amount on T+2, you will incur a fail fee of $25 + 0.1% of the trade value, or a minimum fail fee of $125 per confirmation note per day, (whichever is greater), as outlined in our Financial Services Guide (FSG).

While ‘Sell Orders’ will continue to be accepted, a temporary restriction may be placed on your account, preventing further ‘Buy Orders’. This will remain in place until the outstanding balance is paid. Any outstanding buy orders that you may have in the market will be cancelled.

Please also note that any late or missed settlements may result in a review of your trading facility and reduction in your trading limits.

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Did you know?

To help avoid settlement failures in the future, you can opt into SMS Settlement Notifications by going to My Account > My Profile > Personal Details to receive an SMS reminder on T+1 to ensure you have sufficient funds in your bank account on settlement day (T+2).

* The information above regarding fees and charges is as of April 2023 and can be subject to changes. For more details on our current brokerage rates, please refer to Westpac Share Trading Fees and Charges Schedule.


This information is intended to provide information for educational purposes only and is subject to change at anytime without notice.