{"schema":"https://ver.cy/schemas/card/1.0.0","id":"vr.wm-eco-010","code":"wm-eco-010-clearing-settlement","url":"https://ver.cy/models/wm-eco-010-clearing-settlement/","name":"Clearing / Settlement","alternateNames":["R2"],"kind":"world-model","status":"todo","version":"unversioned","language":"en","classifiers":{"family":"World Models","category":"Society, people and institutions","entryKind":"standalone-mm","plane":"","domain":["SOC.ECO.STL"],"industry":["Cross-industry"],"navPath":"NAV.SOC.ECO.STL","tags":["clearing","settlement","soc.eco.stl"],"facets":{}},"whatItIs":"Clearing and settlement is the process by which obligations arising from payments and trades are calculated, confirmed and finally discharged by transferring money or assets between accounts, recorded as append-only movements of quantities. It covers clearing houses, central counterparties, securities settlement and payment settlement systems, but not the trade or payment instruction itself.","purpose":"Clearing of payment and trade obligations and their final settlement between accounts.","scope":{"in":[],"out":[],"boundaries":[]},"distinguishingFeatures":["Movements are append-only: errors are reversed by new entries, never by editing past ones.","Finality is a legal moment defined by system rules, after which a transfer cannot be unwound.","It discharges obligations created elsewhere, by trades or payment orders.","Distinct from a general ledger, which records an organization's own accounting view of the same movements."],"structure":{"bundles":[{"id":"ECO010-B1","name":"Obligations","description":"What must be settled and between whom.","layers":[{"id":"ECO010-B1-L1","name":"Clearing","description":"Matching, netting and novation of obligations.","findings":[{"id":"ECO010-F01","name":"Obligation set","description":"The obligations submitted for clearing and their netting result.","questions":[{"text":"Which trades or payments are included, and between which participants?","id":"ECO010-Q01"},{"text":"Were obligations netted, and what is each net position?","id":"ECO010-Q02"}]},{"id":"ECO010-F02","name":"Counterparty role","description":"Whether a central counterparty stepped in.","questions":[{"text":"Did a central counterparty become the counterparty to each side?","id":"ECO010-Q03"},{"text":"Which margin or collateral covers the exposure?","id":"ECO010-Q04"}]}]}]},{"id":"ECO010-B2","name":"Settlement","description":"How obligations are discharged.","layers":[{"id":"ECO010-B2-L1","name":"Movements and finality","description":"The account movements and the moment they become final.","findings":[{"id":"ECO010-F03","name":"Settlement movement","description":"Debits and credits of money or assets on settlement accounts.","questions":[{"text":"Which accounts were debited and credited, by which quantities and in which asset?","id":"ECO010-Q05"},{"text":"Was settlement delivery versus payment or free of payment?","id":"ECO010-Q06"}]},{"id":"ECO010-F04","name":"Finality","description":"When the transfer became irrevocable under the system's rules.","questions":[{"text":"At what time did settlement become final and irrevocable?","id":"ECO010-Q07"},{"text":"Which system rules define finality?","id":"ECO010-Q08"}]}]}]},{"id":"ECO010-B3","name":"Exceptions","description":"What happens when settlement fails.","layers":[{"id":"ECO010-B3-L1","name":"Fails and defaults","description":"Failed settlements, buy-ins and participant defaults.","findings":[{"id":"ECO010-F05","name":"Settlement fail","description":"A movement that did not settle on the intended date.","questions":[{"text":"Which movement failed, and for what reason?","id":"ECO010-Q09"},{"text":"Which penalty, buy-in or default procedure applies?","id":"ECO010-Q10"}]}]}]}]},"agentConduct":{"may":["Reconcile settlement reports against expected obligations.","Report net positions, fails and finality times to authorized participants.","Flag mismatches and pending fails before cut-off times.","Prepare settlement instructions for human release."],"mustNot":["Release, cancel or alter settlement instructions without authorization.","Edit or delete a booked movement instead of posting a reversal.","Disclose one participant's positions to another.","Give investment or trading advice based on settlement data."],"requiresHuman":["Releasing payment or settlement instructions.","Declaring a participant default or triggering a buy-in.","Changing system rules, cut-off times or finality conditions."]},"ethics":{"considerations":["Settlement failures can spread losses through the financial system and to ordinary account holders.","Positions and flows are confidential and can be misused for market advantage.","Access rules for settlement systems shape who can compete in markets."],"affectedParties":["Participants and their customers","Central banks and supervisors","Investors and payment users"]},"owners":{"steward":"The operator of the clearing or settlement system, under oversight of the central bank or market supervisor.","roles":[],"masterSystems":["Central counterparty clearing system","Central securities depository","Real-time gross settlement system"]},"relations":[{"target":"wm-eco-009-payment","type":"references","note":"Payments create the obligations that are cleared and settled."},{"target":"world-r2-ledger-and-account","type":"requires","note":"Settlement movements are booked on append-only ledger accounts."},{"target":"wm-eco-016-financial-transaction-journal-entry","type":"neighbor","note":"Participants record the same movements in their own books."}],"interaction":{"identity":{"applicability":"required","items":["Participants are identified by LEI and system participant codes; securities by ISIN.","Settlement instructions and movements carry transaction references unique within the system."]},"properties":{"applicability":"not-applicable","items":[]},"recognition":{"applicability":"optional","items":["A settlement record names participants, an asset, a quantity, an intended date and a status.","Often confused with the trade, the payment order or the bank's internal ledger posting."]},"capabilities":{"applicability":"required","items":["Obligations can be matched, netted and novated to a central counterparty.","Movements can settle, fail, be partially settled or be reversed by a new entry.","Finality is reached at a defined moment under system rules."]},"hazards":{"applicability":"required","items":["Settlement fails and cascading defaults.","Operational outages around cut-off times.","Fraudulent or erroneous instructions released into the system."]},"interfaces":{"applicability":"required","items":["ISO 20022 messages for payments and securities settlement.","ISO 15022 messages still used in securities settlement.","ISO 17442 Legal Entity Identifier and ISO 6166 ISIN for parties and securities."]},"context":{"applicability":"required","items":["Operated by financial market infrastructures under central bank and supervisory oversight.","Settlement finality is protected by law, for example the EU Settlement Finality Directive."]}},"sources":[{"title":"Principles for Financial Market Infrastructures (CPMI-IOSCO)"},{"title":"Directive 98/26/EC on settlement finality in payment and securities settlement systems (European Union)"},{"title":"ISO 20022 Financial services - Universal financial industry message scheme (ISO)"}],"openQuestions":["Planned model: boundary questions, research and every section remain to be written."],"resources":{"spec":"https://ver.cy/models/wm-eco-010-clearing-settlement/spec.yaml","agents":"https://ver.cy/models/wm-eco-010-clearing-settlement/AGENTS.md"},"provenance":{"origin":"planned (registry candidate)","builtFrom":["models/runtime-index.json","ver-cy/world-models/card-supplements/wm-eco-010-clearing-settlement.json"],"providers":[],"researchStatus":"todo","generatedAt":"","builder":"tools/build_cards.py@1.0.0"},"completeness":{"sections":{"classifiers":"filled","whatItIs":"filled","purpose":"filled","distinguishingFeatures":"filled","structure":"filled","agentConduct":"filled","ethics":"filled","owners":"filled","relations":"filled","interaction.identity":"filled","interaction.properties":"not-applicable","interaction.recognition":"filled","interaction.capabilities":"filled","interaction.hazards":"filled","interaction.interfaces":"filled","interaction.context":"filled","sources":"filled"},"notes":{"_":"Planned entry, hidden from the catalogue until researched.","interaction.properties":"Clearing and settlement are institutional processes; quantities are amounts and positions, not physical measurements.","_supplement":"Sections authored in card supplement 1.0.1 by Claude (Opus 5.5) (2026-10-06, unreviewed). Written from the card's existing content and established practice in the field; no new sources were read. Unreviewed."},"score":1.0}}