Business and Personal Finance Dictionary

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 

• NET SETTLEMENT
  
  1. For groups of financial transactions between the same counterparties, the settlement of a group of monetary transactions by delivery of only the net amount due. 2. For derivatives, a type of arrangement between two counterparties to a financial transaction in which the parties exchange value without the delivery of the full value or an asset. FAS 133 defines net settlement to be the case in which neither party is required to deliver an asset that is associated with the underlying. This is the case in which a net amount of interest is exchanged between the parties based upon some notional amount that is not exchanged. See notional amount and underlying.
  
  Back