Trade settlement has come a long way since the 1700s when the Amsterdam Stock Exchange and London Stock Exchange first started cross-listing and trading shares. What once took two weeks—the length of time for a horseback rider and ship to deliver a certificate of stock from Amsterdam to London—now takes two days. The next and not-so-distant frontier is instant settlement.
Trade settlement has evolved over the centuries, and new improvements will help financial market participants settle trades faster, more reliably and with less risk. In this white paper, Fifth Third looks at the how the security settlement process works, how and why it has evolved, what the current state of settlements means for institutional investors, and what improvements are underway to further speed the settlement period.