A rolling settlement is one that you will get your return on after a set period of time. This concept refers to trades that take place with any of the various stock exchange locations. The number of trading days will be known and therefore investors can determine exactly when they will be receiving any funds they have earned on their investments.
This is important because with a rolling settlement there are likely to be investments that are traded each day. This process allows investors to really see how much they have earned for each day, and not as a total over that time frame. It is important to understand that those days may be offset by weekends and holidays. Understanding that can help investors to be accurate about the days in which they can expect to receive payment for their earnings.
You will find that for the past 20 years rolling settlements have been increasingly popular. Due to the high amount of international trades that take place daily, a common ground had to be established for paying out the dividends. That common ground is almost always in the form of a rolling settlement.
