settlement-clearing
Settlement & Clearing
Purpose
Guide the understanding and management of trade settlement and clearing processes. Covers the settlement cycle (T+1 for US equities and corporate bonds as of May 2024), central clearing through DTCC (DTC, NSCC), continuous net settlement, settlement fails management, DVP/RVP settlement, corporate actions impact on settlement, and settlement risk. Enables building or evaluating back-office systems that ensure timely and accurate settlement.
Layer
11 — Trading Operations (Order Lifecycle & Execution)
Direction
retrospective
When to Use
- Designing or evaluating a firm's settlement operations workflow for T+1 compliance
- Understanding the roles of DTC, NSCC, and FICC in the clearing and settlement infrastructure
- Analyzing the impact of continuous net settlement on a firm's daily delivery and payment obligations
- Setting up institutional trade processing workflows (affirmation, confirmation, allocation, matching)
- Investigating the root causes of settlement fails and designing fail reduction programs
- Implementing buy-in procedures and close-out obligations under Regulation SHO Rule 204
- Assessing the impact of corporate actions (dividends, splits, mergers) on pending settlements
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