What is dvp?

DVP stands for Delivery Versus Payment. It's a settlement method used in financial transactions.

Essentially, DVP ensures that the transfer of securities (like stocks or bonds) occurs simultaneously with the transfer of payment. This reduces the risk for both the buyer and the seller. The seller is assured of receiving payment before relinquishing ownership of the securities, and the buyer is assured of receiving the securities after making payment.

Key aspects of DVP include:

• Simultaneous Exchange: The "versus" implies a direct exchange, happening at the same time.
• Risk Mitigation: This is the primary benefit, minimizing principal risk, which is the risk that one party fulfills their obligation (delivery or payment) while the other does not.
• Settlement Efficiency: Streamlines the settlement process, making it more efficient and transparent.
• Central Counterparties (CCPs): Often, CCPs facilitate DVP transactions, acting as intermediaries and guaranteeing settlement.
• Global Standards: DVP is a globally recognized and implemented standard for securities settlement.

Here is a summary with links:

DVP, or Delivery Versus Payment, is a settlement method minimizing principal risk through simultaneous exchange of securities and payment, often facilitated by Central Counterparties (CCPs) adhering to global standards.