Settlement Procedure - 1. Settlement Procedure Settlement...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1. Settlement Procedure Settlement is the final process of stock exchange transaction whereby payment is made by those who have made purchase and by all those who have made sales based on the principle of DVP Delivery Versus Payment DVP A securities industry procedure in which the buyer’s payment for securities is due to at the time of delivery. Security delivery and payment are simultaneous Risk At Settlement: Principal Risk : Growing risk of loosing securities or payments made to defaulting party before the detection of default. Liquidity Risk : Increasing risk due to sellers of securities not receiving payments when due or the buyers who do not receive delivery when it is due. Operational Risk : The risks resulting from inefficiencies in information systems, management failures and human errors due to insufficient capacity unable to meet the growing global securities trading. Trade floor - Risks for shareholder in current system Clearance is the first half of the process that completes your order to buy or sell a security. During clearance, the details on both sides of the transaction are compared electronically to
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/04/2012 for the course HRM 2 taught by Professor Hrm during the Spring '12 term at Hanoi University of Technology.

Page1 / 2

Settlement Procedure - 1. Settlement Procedure Settlement...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online