financial settlement

Financial settlement is the process through which parties finalize a financial transaction, transferring the agreed-upon funds or assets to complete a deal. It involves verifying, confirming, and transferring ownership, often through established systems or institutions like banks or clearinghouses. Settlement ensures both sides fulfill their obligations, reducing risk and ensuring the transaction is legally binding. For example, after buying stocks, settlement is when the cash moves from the buyer to the seller, and the stocks are transferred to the buyer’s account, making the trade official and complete.