Settlement Process

Upon receipt (and acknowledgement) of the settlement instruction, the custodian tries to match the instruction with the instruction sent by the counterparty to its custodian. The process of comparing counterparties to a trade can be accomplished in various ways:

• in the marketplace in which the trade occurs (for example, locked-in trades)
• through custodians
• through clearing firms
• on a trade-by-trade basis

Whichever process is used, there are a number of different pre-value date settlement statuses that can arise following such action.