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Personal foreign exchange settlement account refers to the account opened by individual foreign trade operators and individual businesses ing to applicable provisions, for the purpose of processing operational foreign exchange receipts and disbursements under current account. 1.

Currency forward settlement can either be on a cash or a delivery basis, provided that the option is mutually acceptable and has been specified beforehand in the contract.

A corporate FX transaction involves a bank, on behalf of their corporate client, paying for the currency it sold at an agreed rate to another bank and receiving a different currency in return for the funds being cleared and settled in the local clearings.

The settlement date for stocks and bonds is usually two business days after the execution date (T+2). For government securities and options, it's the next business day (T+1). In spot foreign exchange (FX), the date is two business days after the transaction date.

The clearing house sends instructions to the brokers involved in the transaction. The brokers then direct their respective banks to execute the money transfer and share delivery. Finally, the money and shares are exchanged, and the trade is successfully settled.

Settlement risk is minimized by the solvency, technical skills, and economic incentives of brokers. Settlement risk can be reduced by dealing with honest, competent, and financially sound counterparties. Unsurprisingly, settlement risk is usually nearly nonexistent in securities markets.

After a trade has been matched by a trading system, it needs to be cleared and settled so that the seller gets paid and the buyer gets ownership of the security or currency traded. Clearing is comprised of all steps of the post-trade processes apart from the final payment and change in ownership.