Definition of Delivery Vs. Payment

A type of settlement option that requires that the securities be physically received at the time payment is made.

Applying "Delivery Vs. Payment" to Securities Exams:

Some trusts and banks require the delivery of the physical security to be made prior to releasing the funds to purchase the security. A bona fide delivery vs payment or DVP account must be established and approved by the executing broker dealer prior to executing the order. As more and more securities are being issued in journal entry form only DVP accounts are being used less often.

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