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Securities Settlement Systems

In: The Future of Financial Markets

Author

Listed:
  • David G. Mayes

    (Bank of Finland
    London South Bank University
    University of Stirling)

  • Iftekhar Hasan
  • Timo Iivarinen
  • Karlo Kauko
  • Kari Kemppainen
  • Tanai Khiaonarong
  • Kari Korhonen
  • Harry Leinonen
  • Markku Malkamäki
  • Alistair Milne
  • Kirsi Ripatti
  • Heiko Schmiedel
  • Oz Shy
  • Juha Tarkka
  • Jukka Topi

Abstract

In the chapter on payment systems, the issue of settlement – the final completion of the transaction to the satisfaction of the parties concerned – was largely deferred, because it is a much more substantive issue in the context of securities transactions. In the case of unidirectional payments, only one transaction has to be completed. However, in the case of securities, the security has to be ‘delivered’ to the purchaser in return for the payment.1 This creates two complications, first the matching of the two legs of the transaction and second that an additional system is required that holds and allocates titles to the securities. The first complication also exists where one payment is made in return for another as for example in currency transactions. The key issue here, however, is that several further layers are required in the transaction process.

Suggested Citation

  • David G. Mayes & Iftekhar Hasan & Timo Iivarinen & Karlo Kauko & Kari Kemppainen & Tanai Khiaonarong & Kari Korhonen & Harry Leinonen & Markku Malkamäki & Alistair Milne & Kirsi Ripatti & Heiko Schmie, 2006. "Securities Settlement Systems," Palgrave Macmillan Books, in: The Future of Financial Markets, chapter 4, pages 97-145, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-21231-2_4
    DOI: 10.1057/9780230212312_4
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    Citations

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    Cited by:

    1. Droll, Thomas & Podlich, Natalia & Wedow, Michael, 2016. "Out of sight, out of mind? On the risk of sub-custodian structures," Journal of Banking & Finance, Elsevier, vol. 68(C), pages 47-56.
    2. Carol Osler & Thang Nguyen & Tanseli Savaser, 2011. "Asymmetric Information and the Foreign-Exchange Trades of Global Custody Banks," Department of Economics Working Papers 2011-09, Department of Economics, Williams College.
    3. Docherty, Peter & Wang, Gehong, 2010. "Using synthetic data to evaluate the impact of RTGS on systemic risk in the Australian payments system," Journal of Financial Stability, Elsevier, vol. 6(2), pages 103-117, June.
    4. Nicholas Wilson, 2011. "Fertility Responses to Prevention of Mother-to-Child Transmission of HIV," Center for Development Economics 2011-08, Department of Economics, Williams College, revised Sep 2011.
    5. Milne, Alistair, 2007. "The industrial organization of post-trade clearing and settlement," Journal of Banking & Finance, Elsevier, vol. 31(10), pages 2945-2961, October.
    6. Sauer, Stephan & Mercier, Fabien, 2013. "Optimal CSD reshaping towards T2S," Working Paper Series 1549, European Central Bank.
    7. Frédéric Cherbonnier & Séverine Vandelanoite, 2007. "Enjeux économiques liés à l’intégration des industries du post-marché en Europe," Revue d'Économie Financière, Programme National Persée, vol. 89(3), pages 123-142.

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