Next day settlement
Next day settlementTransaction in which the contract is settled the day after the trade is executed. See: Settlement date.
Next day settlement
Regular way settlementRegular way settlement
In the money and bond markets, the standard basis on which some security trades are settled is that the delivery of the securities purchased is made against payment in Fed funds on the day following the transaction.
Rolling settlementRolling settlement
Settlement is the process by which investors pay for shares they have bought and receive payment for shares they have sold. Before July 1994, this process was done by means of an 'account period', normally ten working days. All the transactions during that period were balanced against each other to produce a single figure, which was either paid to the investor or due from him, depending on whether the value of his purchases was higher or lower than the value of his sales in the period. One of the features of the account period was that transactions taking place at the beginning of it (say, Day 1) didn't have to be settled until about 14 days later, whereas transactions at the end (say Day 10) had to be settled within 4 days.In July 1994, the account period system was replaced by ten day (T+10) rolling settlement, which means that each transaction has to be settled ten days after the transaction date. This was subsequently reduced to five days (T+5) and in February 2001 was reduced to three days (T+3).These significance of rolling settlement and of shortened settlement times is that when investors sell shares, the proceeds get paid into their account quicker, and when they buy shares they have to pay for them quicker. It requires careful money management on the part of the investor.
Dispute Settlement BodyDispute Settlement Body
The entity within the WTO that formally deals with disputes between members. It consists of all WTO members meeting together to consider reports of panels and the Appellate Body.
Settlement optionsSettlement options
The various options available to the beneficiaries of a life insurance policy in the event of the death of the insured. For example a lump sum or an income.
Settlement 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.
Further SuggestionsCash Settlement
Bank for International Settlements
Bank for International Settlements (BIS)
Dispute settlement mechanism
Continuous net settlement (CNS)
Uniform Settlement Statement
Exchange Delivery Settlement Price
Skip day settlement
Cash sale or settlement
Cash settlement contracts
Same Day Funds Settlement (SDFS)
Real Estate Settlement Procedures Act (RESPA)
Exercise settlement amount