Definition
The term “settle” has diverse applications across different fields, including general usage, law, and securities. Below are detailed definitions according to these contexts:
General
Settle refers to the act of paying an obligation or debt.
Law
- Resolve a Legal Dispute: To resolve a legal dispute without reaching the stage of adjudication. This often involves negotiations or mediation to arrive at a mutually acceptable resolution.
- Arrange for Disposition of Property: To arrange for the distribution or handling of property, often occurring between spouses or between parents and children, typically in the context of a dispute such as a divorce.
Securities
Settle means to finalize and complete a securities trade. This involves fulfilling the contract between brokers acting as agents or between a broker and a customer.
Examples
- General Use: Alice and Bob settled their debt by arranging a payment schedule.
- Legal Context - Divorce: During their divorce, they agreed to settle their disputes concerning child custody and property distribution through mediation rather than going to court.
- Securities: The trade between the two brokerage firms was settled within three business days as per the standard practice.
Frequently Asked Questions (FAQs)
Q1: What does ‘settle’ mean in financial terms?
A1: In finance, ‘settle’ refers to completing a securities trade by fulfilling the contractual obligations between brokerage firms or between a broker and a client.
Q2: How does settling a legal dispute differ from adjudication?
A2: Settling a legal dispute typically involves negotiation or mediation to reach a mutually agreeable solution before the case goes to trial (adjudication), thus avoiding potentially lengthy and costly litigation.
Q3: Can property settlements occur outside of divorce proceedings?
A3: Yes, property settlements can occur in various legal and financial scenarios, such as trusts and estate planning, or resolving inheritance disputes.
Q4: What is the typical timeframe for settling a securities trade?
A4: The standard timeframe, referred to as T+2 (trade date plus two business days), is generally the period within which most securities trades are settled.
Q5: What documents are usually involved in settling a legal property dispute?
A5: Documents can include settlement agreements, property deeds, and any relevant legal documents outlining the terms of the settlement.
Related Terms
Adjudication
Adjudication is the legal process by which a judge reviews evidence and argumentation to make a formal decision on a dispute.
Mediation
Mediation involves a neutral third party who assists the disputing parties to reach a mutually acceptable agreement.
Brokerage Firm
A Brokerage Firm is a financial institution that facilitates the buying and selling of financial securities between a buyer and a seller.
Settlement Date
The Settlement Date is the agreed-upon date by which a trade must be settled or completed.
Online References
- Investopedia - “Settlement”
- American Bar Association - “Mediation and Other Forms of Alternative Dispute Resolution”
- Securities and Exchange Commission - “Trade Date vs. Settlement Date”
Suggested Books for Further Studies
- “The Mediation Process: Practical Strategies for Resolving Conflict” by Christopher W. Moore
- “Securities Regulation” by Larry D. Soderquist
- “Financial Markets and Institutions” by Frederic S. Mishkin
- “The Divorce Handbook: Your Basic Guide to Divorce” by James T. Friedman
Fundamentals of Settling: Legal, Financial, and Securities Basics Quiz
Thank you for exploring the various facets of “settle” in legal, financial, and securities contexts, and for engaging with our fundamental quiz questions to deepen your understanding!
