5 ms·

dumb question, why is not practical? As for the root problems, those are not related to the issue from last week (not sure if you're aware, but margin had no fa

dumb question, why is not practical? As for the root problems, those are not related to the issue from last week (not sure if you're aware, but margin had no factor in play with the DTCC requirements).

hehehaha 6y ago
There are many reasons but most importantly, delayed settlement serves as fraud deterrent and error/exception handling. Should be T+1 same as options. Think of it as a database, do you want instantaneous non-reversible commits by default when transactions number in the billions with known error rate? Or perhaps have a reasonable buffer for safety?
- justlurkin12 6y ago
  T+0 implies same day not instant. I think you can enable all of those features with hours of delay instead of days.
  - hehehaha 6y ago
    I can maybe see T-0. But I am pretty sure Vlad is talking about near real-time. Even with T-0, most of the trading is done in the last ten minutes at 3:50 EST (due to vwap). I don’t see the benefit in settling T-0 outweighing the value of safety net provided by extra time overnight.
- unethical_ban 6y ago
  Why are reasonable buffers done in days? Why should fraud prevention be done by lag, rather than proper IAM? And non-malicious errors are reversible.
- PeterisP 6y ago
  For cash, pretty much every country has a functioning real time gross settlement system that manages to do essentially instantaneous non-reversible commits by default and carries all the large payments and the netting settlements for all kinds of smaller bundled payments. Yes, there are risks, errors and fraud - but if that's manageable for very, very large amounts of cash, why wouldn't it be for stock?
  - rodgerd 6y ago
    Most countries do not settle in real-time, or even close to it. Even ones moving towards it are still allowing 5 - 15 minute windows on settlement.
    - hehehaha 6y ago
      I would go even further. If I am building a next gen electronic wallet (which happens to be a side project of mine) I’d build in a full week of escrow-like mechanism by default.

hehehaha 6y ago

There are many reasons but most importantly, delayed settlement serves as fraud deterrent and error/exception handling. Should be T+1 same as options. Think of it as a database, do you want instantaneous non-reversible commits by default when transactions number in the billions with known error rate? Or perhaps have a reasonable buffer for safety?

justlurkin12 6y ago
T+0 implies same day not instant. I think you can enable all of those features with hours of delay instead of days.
- hehehaha 6y ago
  I can maybe see T-0. But I am pretty sure Vlad is talking about near real-time. Even with T-0, most of the trading is done in the last ten minutes at 3:50 EST (due to vwap). I don’t see the benefit in settling T-0 outweighing the value of safety net provided by extra time overnight.
unethical_ban 6y ago
Why are reasonable buffers done in days? Why should fraud prevention be done by lag, rather than proper IAM? And non-malicious errors are reversible.
PeterisP 6y ago
For cash, pretty much every country has a functioning real time gross settlement system that manages to do essentially instantaneous non-reversible commits by default and carries all the large payments and the netting settlements for all kinds of smaller bundled payments. Yes, there are risks, errors and fraud - but if that's manageable for very, very large amounts of cash, why wouldn't it be for stock?
- rodgerd 6y ago
  Most countries do not settle in real-time, or even close to it. Even ones moving towards it are still allowing 5 - 15 minute windows on settlement.
  - hehehaha 6y ago
    I would go even further. If I am building a next gen electronic wallet (which happens to be a side project of mine) I’d build in a full week of escrow-like mechanism by default.