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https://www.investopedia.com/terms/d/dvp.asp
Delivery versus payment is a securities settlement process that requires that payment is made either before or at the same time as the delivery of the securities. The process is meant to reduce the risk that securities could be delivered without payment or that payments could be made without the delivery …
https://moneyterms.co.uk/dvp/
DVP (delivery vs payment) Delivery vs payment (DVP) is a way of controlling the risk to which securities market participants are exposed. Delivery of securities (i.e. the change in their ownership) is done simultaneously with payment. This means that neither the buyer or the seller is exposed to the risk that the other will default.
https://www.law.cornell.edu/cfr/text/12/3.38
(d) Delivery-versus-payment (DvP) and payment-versus-payment (PvP) transactions. A national bank or Federal savings association must hold risk-based capital against any DvP or PvP transaction with a normal settlement period if the national bank 's or Federal savings association 's counterparty has not made delivery or payment within five business days after the settlement date.
https://www.bis.org/cpmi/publ/d06.pdf
Without such a mechanism (delivery versus payment) counterparties are exposed to principal risk, that is, the risk that the seller of a security could deliver (payment);File Size: 407KB
https://www.vps.no/pub/stp-dvp-fop-what-does-it-mean/?lang=en
Delivery versus payment (DVP) is the most widely used payment transaction in which a trade will be settled against payment. In this type of transaction we must both match the counterparty’s securities, but also ensure that the purchaser of the securities have provided the means to pay, so the transaction can be completed.
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