Trade Processing: The Settlement Process (Part 2)
Interactive

Trade Processing: The Settlement Process (Part 2)

Intuition Publishing
Updated Sep 25, 2020

Settlement is, ultimately, the fulfilment of the contract and the reason for executing the deal in the first place - that is, to acquire/dispose of an asset or hedge a risk. Actual settlement involves authorizing the exchange and delivery/receipt of an asset or cash, and is date driven. The means by which payment instructions are made, institutions authorize their bank to move funds, and net their trades for settlement is described here.