Definition of settlement

1. Banking. The accounting process recording the respective debit and credit positions of the two parties involved in a transfer of funds. Funds are available for use and may be drawn at any time afterward. Funds transferred through Fed Wire are available for use at the time the transfer occurs, and are settled by adjusting the reserve account balances of the sending and receiving banks. Checks, automated clearinghouse transfers, and other payments between banks are settled on a provisional basis, because the possibility exists that the person initiating the transfer of funds may not have sufficient funds to cover the payment, or the payment cannot be processed for various reasons.See also netting net settlement
2. Real Estate. The conveyance or transfer of property to a purchaser, and recording of the mortgage lien when sale of the property is finalized. Also known as a mortgage closing.
3. Securities. The delivery of securities by a selling broker, and payment by the buying broker, normally 3 business days (regular way delivery) after the transaction date.

Estates: distribution of an estate's assets by an executor to beneficiaries after all legal procedures have been completed.
Law: agreement reached through negotiation.
Real estate: see closing.

in general, a resolution of differences among various parties. For example, a labor dispute resulting in a strike may finally be settled by a new contract, or a conflict between a landlord and tenant may be settled in a housing court.
Securities: conclusion of a securities transaction in which a broker/dealer pays for securities bought for a customer or delivers securities sold and receives payment from the buyer's broker. regular way delivery and settlement is completed on the third full business day following the date of the transaction for stocks, called the settlement date. Government bonds and options trades are settled the next business day. See also Continuous Net Settlement.
Futures/Options: the final price, established by exchange rule, for the prices prevailing during the closing period and upon which futures contracts are marked to market.

disposition of a claim or policy benefit. Policies may specify time limits for payment of claims or benefits and designate various methods of settlement at the option of the insurer or the insured.

same as closing.