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Get Started in Shares by Glen Arnold

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Settlement

After clearing the transfer of ownership from seller to buyer has to take place; this is called settlement. For the LSE, as in most of Europe, share settlement is T+3. It simply means that shares are transferred to new owners three days after the trade takes place.

Before 1996 the transfer of shares involved a tedious paperchase between investors, brokers, company registrars, market makers and the Exchange. The new system, called CREST, provides an electronic means of settlement and registration. This ‘paperless’ system is cheaper and quicker – ownership is transferred with a few strokes of a keyboard (referred to as dematerialisation).

Under the CREST system, shares are often held in the name of a nominee company rather than in the ...

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