A simple explanation of how shares move around the securities settlement system

[Richard Brown]

All,

I was thinking over the weekend about how colored coins representing real shares could work in reality and realised that one really needs to understand how today's securities settlement systems work to reason about this topic properly. So I wrote up a (simplified) description of how share trades are settled.  I included some thoughts on the implications for colored coins at the end.  Hopefully it's useful.

http://gendal.wordpress.com/2014/01/05/a-simple-explanation-of-how-shares-move-around-the-securities-settlement-system/#!

Richard

[Amos Meiri]

Richard

This is a great post!

Thanks

[Sam Rudnick]

thanks Richard awesome blog

בתאריך יום שני, 6 בינואר 2014 11:29:34 UTC+2, מאת Richard Brown:

[Yoni Johnathan Assia]

Really great article ! Thanks for sharing your knowladge.

I think the key insight is described here :
"However, there is one intriguing possibility with this approach: think through what happens if MegaCorp themselves were to issue colored coins representing their shares"

While i don't think we are going to see big listed companies listing their shares first, we will see new companies issueing their shares initially as coloredcoins, and "brokers" issueing existing companies shares as form of cfds, that way you have a bottom up proccess where feed for trading pure digital companies are riskless and have low costs and established companied will eventually follow sourcing technology to help them issue their shares digitally.

That at least my view :) most revolutions are bottom up.

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[sreedh...@gmail.com]

Dear Richard,

Simple and most effective way of telling how settlement & delivery happens in securities market. My long search ended here and this article is of great help.

If elaborated illustration available for cross-border settlement, kindly share the link.

Kind Regards,
Sreedhar