Hence, what goes after a trade is executed is as important as the actual execution of trades. Settlement is the process where the actual transfer of securities and money takes place while the clearing process is what takes place between the transaction and the settlement such as the matching of accounts and preparing for the transfer of money and securities. There are two types of clearing. It can be bilateral between the two parties in the transaction or central where a third party is used for clearing trades.
Clearing and Settlement
A transaction in a security is not completed until it is settled and efficient securities markets requires well-functioning and safe clearing and settlement processes.
There is an active NSA working group where representatives from the national associations share information on related matters and when deemed necessary act with a common voice towards a variety of counterparties such as for example EU authorities.