4 ms·

There are reasons to prefer settlement is not instantaneous - eg it makes fat finger trades easier to unwind. There are also probably some special cases like cr

There are reasons to prefer settlement is not instantaneous - eg it makes fat finger trades easier to unwind. There are also probably some special cases like creation/destruction of ETF shares, ADRs, IPO greenshoe etc which take a bit longer to work through. But I think the main reason for these changes being slow to occur is because noone wanted to break the system in the process - the settlement process for share trades in the US is/was viewed as quite fragile due to the way it had evolved over time.

atombender 6y ago
Adding support for fast settlement doesn't necessarily mean removing support for slow settlement. The customer placing an order could simply mark trades as "fast" or "slow".
- totalZero 6y ago
  ...And then we would need arbitrageurs to keep the fast NBBO in line with the slow NBBO, so that people in the two pools can trade with each another.
  - atombender 6y ago
    Why? This only affects settlement, not execution. Execution is already "real time".
    - totalZero 6y ago
      Because the trade has two sides that have to agree on settlement terms.