What is settlement & custody? After a trade both buyer and seller must exchange payment for securities in order to finalize the transaction. This final exchange is known as settlement, during which buyer and seller details are matched, ownership of the security reassigned, and payment made. Settlement follows the clearing process, during which accountability for both sides of this process are established, and the obligations of both parties (for delivery of securities or payment of funds) are determined. Custody involves the management, safekeeping and administration of securities on deposits, and may include such services as: - income collection and processing, when a coupon or a dividend is paid on a security.
- events notification, when an action is required on the part of the owner to ensure maximum investment efficiency; or compliance with corporate, legal or regulatory requirements.
- redemption, when a bond reaches maturity or is prematurely redeemed and monies become due.
- global securities financing, improving liquidity and reducing cross-border transaction costs and risks.
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About Clearstream Clearstream is a leading European supplier of post-trading services. The wholly owned subsidiary of Deutsche Börse ensures that cash and securities are promptly and effectively delivered between trading parties. It also manages, safekeeps and administers the securities that it holds on behalf of its customers. Over 700,000 domestic and internationally traded bonds, equities and investment funds are currently deposited with Clearstream. Clearstream maintains relationships with around 2,500 customers in over 110 countries. Its global network extends across 45 markets. Backed by flexible securities lending and collateral management services, Clearstream offers one of the most comprehensive international securities services available, settling more than 400,000 transactions daily. Clearstream International was formed in January 2000 through the merger of Cedel International and Deutsche Börse Clearing. The full integration of Clearstream was completed in July 2002. |
