This reduces settlement risk, allowing time for deal confirmation details and settlement system instructions to go through between counter-parties.
So, for example, a standard spot trade agreed on June 13 (dealt for 13 June) is said to be for value on 15 June; unless either financial centre has a holiday on the 14th or 15th, in which case it will be for value on the 16th. Weekends similarly extend the spot value date.
If a standard spot deal does not settle by the beginning of the second business day after the deal has been struck, interest will start to accrue against the party which has failed to deliver.
With the development of intra-day settlement systems (real-time gross settlement systems - RTGS) in the 1990s, deals may also be done to settle overnight ( T+1 ) for value-tomorrow; and for cash (T + 0), for value today.