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Information > Financial Terms > This page Fails In security markets,
a fail-to-deliver arises when the selling broker or dealer fails to deliver
securities as contracted. On
the position book of the selling broker or dealer, a fail-to-deliver increases
the long security position; on the money books of account, it gives rise
to a debit balance (due from the purchasing broker or dealer upon delivery). A fail-to-receive
arises when the purchasing broker or dealer fails to receive securities
as contracted. On the position
book of the purchasing broker or dealer, a fail-to-receive increases the
short security position; on the money books of account, it gives rise
to a credit balance (due the selling broker or dealer upon receipt of
the securities.) One of the important
measures undertaken to improve deliveries has been inauguration of Central
Certificate Service (CCS), an electronic method for delivering stock between
brokers. Establishment of
the DEPOSITORY TRUST COMPANY, new procedures for settlement and clearing,
and the growing size of the average trade were also credited by the NEW
YORK STOCK EXCHANGE with reducing total fails to normal levels.
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