Capital, Commodity and Money Market – Settlement System
Settlement System
The settlement means netting of transactions. It actually reflects exchange or delivery of against the agreed amount of money. It is a system that allows/permits the holding and transfer of securities against the agreed sum of money and this is called netting off the transaction.
There are 2 types of Settlement Systems:
- Accounting Period Settlement System; and
- Rolling Settlement also referred as T+2 rolling settlement
Accounting period settlement system is not used nowadays i.e. all the transactions are generally settled using Rolling Settlement System only.
- Accounting Period Settlement System :
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