Settlement and Delivery: Rapid Fire
Chapters in this video
- 0:00 When-issued securities and the no-settlement trap
- 1:13 Settlement cycles and the T+1 ex-dividend rule
- 2:48 Registrar versus transfer agent
- 3:38 Good delivery, forged signatures, and DVP/RVP
- 5:03 Trade reporting acronyms: TRACE, RTRS, TRF
- 6:18 Cash account freezes, ATS versus exchange, ECN versus dark pool
- 6:47 Rapid-fire exam recap
What this video covers
- Why when-issued securities have no settlement date until the issue is actually released, and what happens if the issue is cancelled
- How T+1 settlement makes the ex-dividend date identical to the record date, and why buying on the ex-date means you miss the dividend
- The distinct roles of the registrar (preventing over-issuance) versus the transfer agent (handling ownership changes and validating mutilated certificates)
- Why good delivery requires exact divisors of 100 shares, and the three reasons Carla's deceased-grandfather certificate fails every test
- How Delivery Versus Payment (DVP) and Receive Versus Payment (RVP) describe the same institutional cash-for-securities exchange from opposite sides
- Why a fail to deliver does not cancel the trade, and the timeline for buy-in notice then execution after a settlement fail
- Which reporting system maps to which security: TRACE for corporate bonds, RTRS/EMMA for municipals, and the Trade Reporting Facility (TRF) for over-the-counter equities
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