When will the amount be deposited after selling the shares?

 When will the amount be deposited after selling the shares?


Before the Internet made it possible to transfer money instantly, owning shares meant having a physical certificate of ownership of shares, and the process of trading securities and depositing the amount after selling them required several days to complete. This is why the Securities and Exchange Commission (SEC) created settlement periods to allow buyers and sellers time to actually exchange trade values. Although today, transferring funds no longer takes days at worst, settlement times are still an important factor in securities trading that investors should consider. If you are wondering when the amount will be deposited after selling the shares in Al-Inma, Al-Rajhi, Riyadh and Al-Ahli Banks, then here are the answers you are looking for.

What are unreconciled amounts?

The proceeds generated by selling a security are considered as unsettled money (also known as unsettled money) from the time you place your order until the completion of the settlement period which we will discuss below in the article. Since most financial markets around the world have a settlement period of two business days, the proceeds generated from the sale of shares in a brokerage account linked to these markets are considered unsettled money for two days after the trade date, since the sale has not technically been completed.

What are settled or settled funds?

Stable money is basically the opposite of unstable money. The proceeds from the sale of securities become stable funds after the settlement period ends. Likewise, the cash you deposit or transfer to your brokerage account for use in trading is cleared.

What is the settlement period?

The settlement period is the period from the date of execution of the transaction in the market to the date of termination of the transaction. Under Federal Reserve Regulation T, securities transactions in a cash account must be paid in full. By the end of the settlement period, the buyer must have paid the transaction value in full and the seller must have delivered the asset.

Since fund transfers can now be completed instantly, many financial markets around the world have adopted a two-day settlement period instead of the current three-day settlement period since 1993. More specifically, this means that the settlement of stock trades It takes place two business days after the trade date (T + 2). For example, if the shares are sold on Monday, the deal is settled on Wednesday. ETFs follow the same rules as stocks and have a settlement period of T+2 days.

Other types of securities have different settlement periods. For example, options trades are settled in most financial markets within one business day after the trade date (T + 1). Most mutual funds currently approved settlement periods are T+2 business days, but some may vary between the one- and three-day T+1 and T+3 settlement periods.

If you have sold the shares through Al-Rajhi Bank by taking advantage of its brokerage services, then you should know that depositing the amount after selling the shares in Al-Rajhi Bank will take place two days later, i.e. on the third day of the sale and execution of the order.

When is the amount deposited after selling the shares to Riyad Bank?

In the case of Riyad Bank, the period for settling the sale amounts did not change until in 2022, as deposits were made after two working days from the day of execution.

When is the amount deposited after selling the shares in Al Ahly Bank?

Al Ahli Bank brokerage services are linked to the Saudi financial market, which adopts a settlement period of two working days. Therefore, in this case also, the sale amounts are deposited after two working days have passed from the day of execution, i.e. on the third day.

When is the amount deposited after selling the shares in Alinma Bank?

The settlement period for Alinma Bank is the same as the Saudi Tadawul settlement period. This means that after selling the shares, you will have to wait for two days for the amount to be deposited into your account.

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