Naked short sales and fails-to-deliver: An overview of clearing and settlement procedures for stock trades in the USA

Publisher:
Henry Stewart Publications
Publication Type:
Journal Article
Citation:
Journal of Securities Operations and Custody, 2010, 2 (4), pp. 340 - 350
Issue Date:
2010-01
Full metadata record
Files in This Item:
Filename Description Size
Thumbnail2011002715OK.pdfPublished Version3.92 MB
Adobe PDF
This article outlines the process of clearing and settlement for stock trades in the US. It pays particular attention to what happens when the seller of a stock fails to deliver that stock at settlement and describes the mechanisms to resolve delivery failures. Fails to deliver can occur for a number of reasons, such as human error, administrative delays and the controversial practice of naked short selling. This article helps understand the implications of naked short selling for trade counterparties and, more generally, the effects of naked short selling on the clearing and settlement system.
Please use this identifier to cite or link to this item: