Rolling Settlement

Rolling Settlement is the system by which shares are bought sold and paid for. For a long time investors in the UK could buy shares and effectively not have to find the cash to pay for them for at least 10 days - a sort of limited credit was allowed. But to bring us into line with the systems in many other countries Rolling Settlement was introduced with share settlement being completed much sooner after the transaction has been struck.

The system of handling share settlements is known as CREST. It came into operation in July 1996 when the London Stock Exchange began the transition to paperless dealing.

The period between dealing and settlement used to be up to 3 weeks. The process is far shorter nowadays. Eventually ALL deals will be instantaneous too.

See also our guide to stockmarket investment If you're looking for free share prices try our Stockmarket section.

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2009-02-17 00:00:00 © Moneyextra.com