# Clearing and Settlement Glossary

> 10 terms from the Investing & Digital Assets book's Clearing and Settlement part, each defined in a line and linked to the chapter that explains it.

- **Affirmation:** an institutional customer's agreement to a trade's allocation and confirmation details, required as soon as technologically practicable and no later than the end of trade date under T+1 ([The Investing & Digital Assets Business](https://www.syntaqx.com/books/investing-and-digital-assets/investing-business#the-life-of-a-stock-trade)).
- **Book entry:** moving ownership of securities by debiting and crediting participants' accounts at a depository, with no certificate moving ([The Investing & Digital Assets Business](https://www.syntaqx.com/books/investing-and-digital-assets/investing-business#the-life-of-a-stock-trade)).
- **Continuous Net Settlement (CNS):** NSCC's system that nets each member's eligible trades in a security to one position per day and becomes counterparty to each accepted trade ([The Investing & Digital Assets Business](https://www.syntaqx.com/books/investing-and-digital-assets/investing-business#the-life-of-a-stock-trade)).
- **DTC (The Depository Trust Company):** the US securities depository, where settlement moves securities and cash between participants by book entry ([The Investing & Digital Assets Business](https://www.syntaqx.com/books/investing-and-digital-assets/investing-business#the-life-of-a-stock-trade)).
- **Novation:** a clearing house replacing the original counterparties to a trade, becoming buyer to every seller and seller to every buyer and guaranteeing settlement ([The Investing & Digital Assets Business](https://www.syntaqx.com/books/investing-and-digital-assets/investing-business#the-life-of-a-stock-trade)).
- **NSCC (National Securities Clearing Corporation):** the DTCC clearing agency that clears and nets US equity trades and collects margin from its members ([The Investing & Digital Assets Business](https://www.syntaqx.com/books/investing-and-digital-assets/investing-business#the-life-of-a-stock-trade)).
- **SIPC protection:** coverage for missing customer assets when a member broker-dealer fails, up to $500,000 per customer including $250,000 of cash; not for losses in value, non-security digital assets or stablecoins ([The Investing & Digital Assets Business](https://www.syntaqx.com/books/investing-and-digital-assets/investing-business#the-life-of-a-stock-trade)).
- **Stock record:** a broker-dealer's securities record of every long and short position by security as of clearance dates, and where each long position is held ([The Investing & Digital Assets Business](https://www.syntaqx.com/books/investing-and-digital-assets/investing-business#the-life-of-a-stock-trade)).
- **T+1:** the standard US settlement cycle of one business day after trade date, in force since May 28, 2024 ([The Investing & Digital Assets Business](https://www.syntaqx.com/books/investing-and-digital-assets/investing-business#the-life-of-a-stock-trade)).
- **Trade confirmation (Rule 10b-10):** the written notice a broker-dealer gives at or before completion of a transaction, with date, time, price, quantity, capacity and payment for order flow ([The Investing & Digital Assets Business](https://www.syntaqx.com/books/investing-and-digital-assets/investing-business#the-life-of-a-stock-trade)).

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