Good Delivery

Good delivery is a term used in the financial markets to describe the condition of a security that is being delivered in a trade. In order for a security to be considered good delivery, it must meet certain criteria, such as being in the correct form, being free of any defects, and being accompanied by the proper documentation.

The specific requirements for good delivery vary depending on the type of security being delivered. For example, stocks must be in the form of a certificate, while bonds may be in the form of a certificate or a book entry. In addition, securities must be free of any defects, such as being mutilated or counterfeit. Finally, securities must be accompanied by the proper documentation, such as a stock certificate or a bond indenture.

If a security does not meet the requirements for good delivery, it may be rejected by the receiving party. This can lead to delays in the settlement of the trade and may also result in additional costs. For this reason, it is important for traders to ensure that their securities are in good delivery condition before they are delivered in a trade.

There are a number of steps that traders can take to ensure that their securities are in good delivery condition. First, they should make sure that the securities are in the correct form. For example, stocks must be in the form of a certificate, while bonds may be in the form of a certificate or a book entry. Second, traders should check the securities for any defects. If the securities are mutilated or counterfeit, they will not be accepted in good delivery. Finally, traders should make sure that they have the proper documentation to accompany the securities. This documentation may include a stock certificate or a bond indenture.

By following these steps, traders can help to ensure that their securities are in good delivery condition and that they will be accepted by the receiving party.