settlement

(noun)

Settlement of securities is a business process whereby securities or interests in securities are delivered, usually against (in simultaneous exchange for) payment of money, to fulfill contractual obligations, such as those arising under securities trades.

Related Terms

Examples of settlement in the following topics:

  • Global Research Settlement

    • The Global Settlement was an enforcement agreement to address issues of conflict of interest within the SEC and other big investment companies.
    • The investment firms involved in the settlement had all engaged in actions and practices that had aided and abetted the inappropriate influence of their research analysts by their investment bankers seeking lucrative fees.
    • Similarly, the Global Settlement also increased the IPO "quiet period" from 25 days to 40 days.
    • Other than these regulatory actions, the firms involved in the settlement were required to pay fines to their investors, to fund investor education, and to pay for independent third-party market research.
    • Describe how the Global Research Settlement addressed conflicts of interest in the market

  • Spot Rates, Forward Rates, and Cross Rates

    • Spot & forward rates are settlement prices of spot & forward contracts; cross rates are the exchange rate between two unofficial currencies.
    • In finance, a spot contract, spot transaction, or simply "spot," is a contract of buying or selling a commodity, security, or currency for settlement (payment and delivery) on the spot date, which is normally two business days after the trade date.
    • The settlement price (or rate) is called a "spot price" or "spot rate. "
    • The settlement price of a forward contract is called a "forward price" or "forward rate. " Depending on the item being traded, spot prices can indicate market expectations of future price movements.

  • Striking Agreements to Avoid Bankruptcy

    • Most creditors are willing to negotiate a settlement to receive a portion of their money and not risk losing everything in a bankruptcy.
    • Therefore, most creditors are willing to negotiate a settlement so that they receive a portion of their money, instead of risking losing everything in a bankruptcy.

  • Liabilities and Equity

    • In financial accounting, a liability is defined as an obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.
    • A duty or responsibility to others that entails settlement by future transfer or use of assets, provision of services, or other transaction yielding an economic benefit, at a specified or determinable date, on occurrence of a specified event, or on demand;
    • A duty or responsibility that obligates the entity to another, leaving it little or no discretion to avoid settlement; and,

  • Chapter Questions

    • Please define the following terms: current account, trade balance, financial account, and official settlement balance.

  • Securities Acts Amendments of 1975

    • The 1975 amendments are to establish a national market system for the nationwide clearance and settlement of securities transactions.
    • The 1975 amendments, also called the National Exchange Market System Act, directed the securities and exchange commission to work with the industry toward establishing a national market system together with a system for the nationwide clearance and settlement of securities transactions.

  • Managing Collections

  • Understanding the Needs of the Business

    • Conversely, a firm strives to put off the settlement of accounts payable as long as possible for the same reason.

  • Implications for Variance

    • insurance products (an annuity , a life settlement , a catastrophe bond , personal life insurance products, etc.)

  • Answers to Chapter 15 Questions

    • Finally, the official settlements account represents the intervention of the central bank.