Search Options
Home Media Explainers Research & Publications Statistics Monetary Policy The €uro Payments & Markets Careers
Suggestions
Sort by

Payments and markets glossary

safekeeping services

The holding of physical securities on behalf of other parties.

same-day funds

Funds which the recipient is entitled to transfer or withdraw from an account on the day of receipt. See also intraday liquidity

scheduling

Technique for managing payment queues by determining the order in which payments are accepted for settlement. See also queuing

secondary site

A location other than the primary site which systems can use to resume their business operations and other functions in the event of a disaster.

securities settlement system (SSS)

A system which allows the transfer of securities, either free of payment (FOP) or against payment (delivery versus payment).

segregation

A method of protecting a client’s assets by holding them separately from those of the custodian (or other clients, as the case may be).

SEPA

See Single Euro Payments Area (SEPA)

settlement

The completion of a transaction or of processing with the aim of discharging participants’ obligations through the transfer of funds and/or securities. A settlement may be final or provisional. See also final settlement, gross settlement, net settlement, provisional settlement

settlement account

An account held at a central bank or a central securities depository, or with a central counterparty or any other institution acting as a settlement agent, which is used to settle transactions between participants in a system.

settlement agent (settlement institution)

The institution across whose books transfers between participants take place in order to achieve settlement within a settlement system. See also bilateral net settlement system, multilateral net settlement system, settling participant

settlement asset

An asset or a claim on an asset that is accepted by a beneficiary in order to discharge a payment obligation.

settlement bank

See settling participant (settlement bank; settling member)

settlement cycle (settlement interval)

In the field of securities, the time period that elapses between the trade date and the settlement date.

settlement date

See settlement day (settlement date)

settlement day (settlement date)

The day on which settlement actually takes place.

settlement failure

The inability of a participant to meet its settlement obligations in a system. This inability may be temporary or permanent. See also default, failed transaction

settlement institution

See settlement agent (settlement institution)

settlement interval

See settlement cycle (settlement interval)

settlement lag (payment lag)

In a transfer system, the time lag between the acceptance of the transfer order by the system and its final settlement. In an exchange-for-value system, the time lag between entering into a trade/bargain and finally exchanging the financial asset for payment.

settlement obligation

The requirement, as a result of the settlement process, that a participant in a settlement system effect payment or deliver assets.

settlement risk

The risk that settlement in a transfer system will not take place as expected, usually owing to a party defaulting on one or more settlement obligations. This risk includes, in particular, operational risks, credit risks and liquidity risks. See also credit risk, liquidity risk, operational risk

settlement system

A system used to facilitate the settlement of transfers of funds, assets or financial instruments. See also funds transfer system, securities settlement system

settling member

See settling participant (settlement bank; settling member)

settling participant (settlement bank; settling member)

A participant which maintains one or more accounts with a settlement agent in order to settle funds or securities transfers on its own behalf or, potentially, for other market participants. See also settlement agent, tiering arrangement

SFT

securities financing transaction

Single Euro Payments Area (SEPA)

A process initiated by European banks and supported, inter alia, by the Eurosystem and the European Commission with a view to integrating retail payment systems and transforming the euro area into a true domestic market for the payment industry.

SIPS

See systemically important payment system (SIPS)

smart card

See chip card (smart card)

specialised depository

An entity, usually a credit institution, that provides international central securities depositories (ICSDs) with safekeeping and asset servicing for physical certificates (“individual notes”) that represent shares in international debt instruments (e.g. Eurobonds). See also common depository

SSS

See securities settlement system (SSS)

standing facility

A central bank credit facility available to counterparties at their own initiative. The Eurosystem offers two overnight standing facilities: the marginal lending facility and the deposit facility. See also deposit facility, marginal lending facility

standing order

An instruction from a customer to its bank to make a regular payment of a fixed amount to a named beneficiary.

STP

See straight-through processing (STP)

straight-through processing (STP)

The automated end-to-end processing of trades/payment transfers – including, where relevant, the automated completion of confirmation, matching, generation, clearing and settlement of orders.

substitution of securities

A situation in which an institution which has provided securities as collateral recalls them and replaces them with other securities of equivalent market value.

survivors pay

A loss-sharing arrangement which, in the event of a participant’s inability to settle, requires losses to be borne by the other (non-defaulting) participants in accordance with a predetermined formula. Antonym: defaulter pays

systemic risk

The risk that the inability of one participant to meet its obligations in a system will cause other participants to be unable to meet their obligations when they become due, potentially with spillover effects (e.g. significant liquidity or credit problems) threatening the stability of or confidence in the financial system. That inability to meet obligations can be caused by operational or financial problems.

systemically important payment system (SIPS)

A payment system which has the potential to trigger systemic risks in the event of it being insufficiently protected against the risks to which it is exposed.