The settlement date is the date on which the buyer of a securitisation transaction pays the seller for the securities and the seller delivers the securities to the buyer.
Here are some applications of a settlement date in securitisation:
- To determine the ownership of the securities: The settlement date is used to determine the ownership of the securities. This is because the buyer of the securities will become the legal owner of the securities on the settlement date.
- To determine the payment of interest: The settlement date is also used to determine the payment of interest. This is because interest payments are typically paid on the settlement date.
- To determine the delivery of the securities: The settlement date is also used to determine the delivery of the securities. This is because the seller of the securities is required to deliver the securities to the buyer on the settlement date.