A transaction in which the buyer's payment for securities is due at the time of delivery (usually to a bank acting as agent for the buyer) upon receipt of the securities. The payment may be made by bank wire, check, or direct credit to an account.
The acronym for DVP (delivery versus payment), or transactions in which there is simultaneous transfer of cash and securities following the trade. A basic feature of automated clearing and settlement, DVP reduces risk significantly: today fewer than 0.25% of all DVP instructions presented for settlement fail, on average, and even these are automatically recycled for settlement.
See: COD Transaction.
Securities industry procedure whereby delivery of securities sold is made to the buying customer's bank in exchange for payment, usually in the form of cash.
Settlement arrangements ensuring that neither the buyer nor the seller are at risk from default; i.e. not having the cash or the securities. CREST provides such a structure. See Cash Against Document.
There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities.
Basis: Under this settlement rule, the delivery of and payment for bonds are simultaneous.
Delivery of securities to a designated point (bank or broker) upon receipt of payment for the securities; can be in the form of a bank-wire or a check.
The simultaneous exchange of securities (delivery) and cash value (payment) to settle a transaction.
See: COD Transactions.
Settlement of security transactions used by institutional customers. Certificates are delivered to a bank designated by the customer whereupon the bank makes payment on delivery.
A type of securities transaction in which the purchaser pays for the securities when they are delivered either to the purchaser or his/her custodian.
a link between a securities transfer system and a funds transfer system that ensures that delivery occurs if, and only if, payment occurs.
securities industry term indicating payment is due when the buyer has securities in hand or a book entry receipt.
The purchase of securities in a cash account with instructions that payment will be made upon the delivery of the securities, usually to an agent bank.
A delivery instruction where the delivery of securities and the payment of the cash consideration are linked.
An industry standard control ensuring the owner is always in possession of either the security or the proceeds of the transaction. With DVP, payment for the security occurs simultaneous with the delivery of the security.
Securities industry procedure whereby the sold securities are delivered to the buyer's bank in exchange for payment. From the seller's perspective, it is called "receive versus payment." Institutional customers customarily use delivery versus payment to make settlement on transactions. It is also referred to as COD (cash on delivery) transactions.
Delivery versus payment is used to classify a business transaction.