Settlement System

Is any system which is involved in the Settlement of Financial Transactions through the transmission of fiscal value. It includes the institutions, instruments, people, rules, procedures, standards and technologies that make Settlements possible. 

How does Settlement System work?

Traditionally Settlement System did not use the physical transfer of funds but, rather employed the usage of Negotiable Instruments and Documentary Credits. Nowadays, with the advent of SWIFT, Clearing Systems, RTGS it became even easier to transfer fiscal value by using such systems as it became possible to instantly transmit the information of the Order. Settlement Systems work by adhering to distributed information regarding the Order between participants and subsequently enabling the Settlement. Most commonly it is done through the revaluation of the amounts held within the common institution.

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