In New York, the trade settlement system functioned without a hitch even on Black Monday in October 1987 when the New York Stock Exchange was overwhelmed by trading volume of more than 600 million shares.
Trades, averaging more than 513,000 a day, are typically cleared in five days, although most are now ready for settlement within three, according to the National Securities Clearance Corporation, which handles 97 per cent of the processing.
Clearance and settlement has been centralised since 1976 in the NSCC, a system owned by America's three big exchanges - the New York, Nasdaq and the American. The system is almost completely automated.
Ownership of shares and bonds is tracked centrally, both by the NSCC and by the Depositary Trust Corporation, the institution where most US securities certificates are stored.
Low volumes and use of a single custodian mean Frankfurt is able to transact settlements in less than the internationally recommended three-day cycle. Details of a completed transaction are sent by computer to the central custodian, the Deutsche Kassenverein, which deals with the transfer of share ownership.
On the second day after the transaction, the Kassenverein completes the formalities of the switch in ownership, while the Landeszentralbank, where all the banks operating on the exchange are obliged to hold accounts, simultaneously completes the payment arrangements.
Paris also boasts simultaneous payment and delivery for deals through a central depository, Sicovam, with most trades settled within three days.Reuse content