Trade settlement Short Video-1, recorded this video while teaching to the Client .
Trade settlement is the act of exchanging securities and cash between buyer and seller. Due to the global nature of the securities industry, trade settlement typically occurs at the STO's custodians located in the various financial centres. Historically, trade settlement would have been effected by the physical delivery of certificates from seller to buyer, in exchange for cash.
In very general terms, it is to be expected that within each marketplace, the majority of trades settle on their value date (the intended date of delivery and payment, also known as the contractual settlement date), with those trades that do not settle on their value date settling at any later point in time. The date that the exchange of securities and cash is effected is known as the settlement date, or ‘actual settlement date’.