Settlement, Delivery, and Trade Reporting

Operational questions on the Series 7 test whether you can connect trades to settlement obligations, understand who moves securities and cash, and recognize what happens when a contract fails. These questions are procedural, but they still turn on precise distinctions.

This chapter starts with settlement conventions, then moves through delivery systems, trade reporting, and the corrective procedures used when one side of a transaction fails to perform.

In this section

• Settlement Procedures
  Review regular-way, cash, and seller's-option settlement and the timing rules tied to each.
• Book-Entry and Physical Delivery
  Understand DTC, custodial arrangements, and how modern book-entry delivery differs from physical certificate delivery.
• Trade Reporting Systems
  Review FINRA trade reporting facilities, the consolidated tape, and the role of market transparency systems.
• Failures to Deliver and Receive
  Understand close-outs, buy-ins, sell-outs, and the procedures used when settlement does not occur as expected.