Payments and markets glossary

A payment where the payer and the payee are in the same physical location. Antonym: remote payment

See failed transaction (fail)

A transaction that does not settle on the contractual settlement date. Such a transaction may be retained and may settle thereafter.

The ultimate recipient of rights in securities held on a securities account (e.g. ownership rights, voting rights or dividends).

A settlement or transfer is final when it is unconditional, enforceable and irrevocable, even in the framework of insolvency proceedings opened against a participant (except in the case of criminal offences or fraudulent acts, as determined by a competent court). In the European context, a distinction is made between: 1) the enforceability of a transfer order which is binding on third parties and protected from insolvency risks, provided that the transfer order was entered in the relevant system, in accordance with the rules of that system, prior to the opening of insolvency proceedings (with transfer orders entered in a system following the opening of insolvency proceedings being legally enforceable only in exceptional circumstances); and 2) the irrevocability of a transfer order which cannot be revoked by the participants as of the point in time laid down in the rules of that system. Finality of transfer order is distinguished from finality of transfer, when entitlement is legally transferred to a receiver.

See final settlement (final transfer)

The risk that a party to a foreign exchange transaction will transfer the currency it has sold, but not receive the currency it has bought. This is a form of principal risk. See also payment versus payment, principal risk

A card scheme where the stakeholders involved are: 1) the issuer; 2) the acquirer; 3) the cardholder; and 4) the card acceptor. (In the case of automated teller machine (ATM) transactions, it is usually the acquirer that offers its services via the ATM.) By contrast, in a three-party card scheme, the issuer and the acquirer are always the same entity. See also three-party card scheme

A delivery of securities which is not linked to a corresponding transfer of funds.

See funds transfer system (FTS)

A formal arrangement based on a private contract or legislation, with multiple membership, common rules and standardised arrangements, for the transmission, clearing, netting and/or settlement of monetary obligations arising between its members. See also interbank funds transfer system, payment system

A characteristic of securities which are substitutable on account of their being identical.