Episode 8: Clearing and Settlement

Episode Summary In this episode, John and Jane look at the crucial gap between agreeing to a trade and actually completing it. They explain the roles of clearing and settlement, focusing on the "most important boring institution in finance" that guarantees your money and shares arrive as promised. The hosts discuss the 2024 move to T+1 settlement in North America and how the system manages millions of trades through the invisible process of netting. Jane also provides a critical practical warning about how this "boring" machinery can catch investors off-guard at tax time.

Key Concepts

• Clearing vs. Settlement: Clearing is everything that ha ...