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Cash settlement contracts |
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Cash settlement contractsFutures contracts such as stock index futures that settle for cash and do not involve delivery of the underlying.Cash settlement contracts Similar MatchesCash settlementCash settlementDeals on an exchange where investors are obliged to settle immediately rather than on account.An expression used in futures and options trading which applies when physical delivery is impractical and contracts are settled by attaching a monetary value. Settlement optionsSettlement optionsThe various possibilities open to a beneficiary under a life insurance policy as to how the benefit will be paid out. SettlementSettlementSettlement is what happens after your broker has bought or sold shares on your behalf. There are three aspects to it:Transfer of ownershipIf you have a nominee account with your broker, the shares you buy or sell are registered in the broker's name, and responsibility for sorting out changes of ownership rests with the broker and the registrar.If you have a certificated account, and you have sold shares, you have to send the share certificate(s) to the broker so that settlement can be effected. If you have bought shares, you will receive a share certificate from the company's registrar either direct or vis your broker.Payment when you buy sharesShare purchases have to be paid for. If your broker works on a 'cleared funds' basis, you will have to have enough money in your broker account to pay for the shares and transaction costs before you buy them. If you haven't got the money available, the broker's system will spot the deficit, and will not process the order.For offline trading, your ability to buy 'on credit' will depend on the kind of relationship you have with your broker. If you have £300 in your account and want to buy £12,000 of shares, eyebrows will be raised and you may be asked to deposit money with the broker before the order is processed.Once a broker has bought shares on your behalf, you have an obligation to supply him with funds prior to the settlement date. Most brokers will accept cheques, direct bank transfers, and debit cards. It is important to check how your broker accepts payment beforehand.Receipt of proceeds when you sell sharesWhen you sell shares, the broker will credit funds to your client account after deducting commission. It is then up to you to decide what to do with that money. You can ask your broker to send the money to your normal bank account, or you can reinvest it in the market, or you can leave it in the client account where it will earn interest.The timing of payment will depend on the settlement time of your transaction. The industry standard used to be T+5 but this changed to T+3 in February 2001. The '5' and '3' simply indicate the number of working days after the transaction date by which settlement must be complete. Next day settlementNext day settlementTransaction in which the contract is settled the day after the trade is executed. See: Settlement date. Dispute settlement mechanismDispute settlement mechanismThe procedure by which the WTO settles disputes among members, primarily by means of a three-person panel that hears the case and issues a report, subject to review by the Appellate Body. Further SuggestionsInsurance settlementRegular way settlement Settlement risk Short settlement Bank for International Settlements (BIS) Settlement price rolling settlement Continuous net settlement (CNS) Good delivery and settlement procedures Bank for International Settlements Same Day Funds Settlement (SDFS) Uniform Settlement Statement Skip day settlement settlement options Real Estate Settlement Procedures Act (RESPA) Settlement rate Exercise settlement amount Cash sale or settlement Cash Settlement Exchange Delivery Settlement Price Dispute settlement Regular settlement Settlement Immediate settlement Dispute Settlement Body |
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