Legal Significance
After the trade and before settlement, the rights of the purchaser are contractual and therefore personal. Because they are merely personal, their rights are at risk in the event of the insolvency of the vendor. After settlement, the purchaser owns securities and their rights are proprietary. Settlement is the delivery of securities to complete trades. It involves upgrading personal rights into property rights and thus protects market participants from the risk of the default of their counterparties.
Read more about this topic: Settlement (finance)
Famous quotes containing the words legal and/or significance:
“I have spent all my life under a Communist regime, and I will tell you that a society without any objective legal scale is a terrible one indeed. But a society with no other scale but the legal one is not quite worthy of man either.”
—Alexander Solzhenitsyn (b. 1918)
“The hypothesis I wish to advance is that ... the language of morality is in ... grave disorder.... What we possess, if this is true, are the fragments of a conceptual scheme, parts of which now lack those contexts from which their significance derived. We possess indeed simulacra of morality, we continue to use many of the key expressions. But we have—very largely if not entirely—lost our comprehension, both theoretical and practical, of morality.”
—Alasdair Chalmers MacIntyre (b. 1929)