Delivery Versus Payment Settlement
Chapters in this video
- 0:00 The cinematic standoff of trade settlement
- 1:25 DVP and RVP: opposite sides of the same linked exchange
- 2:56 Mandatory book-entry settlement and the depository-eligible trap
- 4:14 DVP settlement versus customer asset protection
- 5:00 Reclamation after acceptance versus rejection at presentation
- 6:45 Rapid-fire exam recap
What this video covers
- How delivery versus payment (DVP) links the transfer of securities to the transfer of cash so neither side takes the other's credit risk during settlement
- Why DVP and receive versus payment (RVP) describe the exact same linked exchange from opposite sides, with DVP as the delivering or selling side and RVP as the receiving or buying side
- When mandatory book-entry settlement through a securities depository applies, and why the exam traps you on the dual requirement of a customer DVP/RVP transaction plus a depository-eligible security
- How DVP settlement differs from customer asset protection, custody, and safekeeping, which protect property the firm carries rather than the exchange itself
- Why trade comparison happens before settlement, and what question it answers about whether buyer and seller agree on trade details
- The timing difference between rejection at the moment of presentation and reclamation after acceptance, and why neither is part of a normal DVP/RVP settlement
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