In CREST settlement, which stages occur simultaneously?

• A. Stage 1 and Stage 2
• B. Stage 1 and Stage 4
• C. Stage 2, Stage 3 and Stage 4 occur simultaneously
• D. Stage 2 and Stage 3 only

Answer: (C)

In CREST settlement, the later stages are carried out together during the settlement window, so the cash leg, the securities leg, and the recording of the final positions move forward in parallel. Once trade instructions reach the settlement phase, Stage 2 handles the cash settlement, Stage 3 handles the delivery and receipt of securities through CREST, and Stage 4 updates accounts and completes the settlement records. This simultaneous processing is enabled by the system’s delivery-versus-payment mechanism, which ties the transfer of cash to the transfer of securities and reduces settlement risk. Stage 1 happens earlier as the trade is captured and prepared for settlement, but the remaining stages occur at the same time.