MONEY CLEARANCE AND SETTLEMENT 393
Through these methods, payment for securities delivered
is effected on the members’ accounts at the Stock Clearing Cor-
poration, rather than by the passing of checks between them
as was done prior to 1920. For every actual credit entered for
a member, there must be a corresponding debit for some other
member.
“Failures to Deliver.”—Of{ course there is always a possi-
bility that for some reason or other a delivering member may
find it impossible to make a security delivery, either as a whole
or in part. Under the rules of the Stock Exchange (Chapter
IV) and of the Stock Clearing Corporation (Rule 32), the
failure of a member to deliver or receive securities on regular-
way contracts by 2:15 p. M. of the next full business day after
contract, may result in the securities being “bought in” or “sold
out.” But if such a failure to deliver results from an agree-
ment between the delivering and receiving member, it is con-
sidered that they have entered into a new contract on which
they alone are liable, and under which the securities must be
delivered and paid for directly between themselves and not
through the Stock Clearing Corporation.
To the extent that such “failures to deliver” or “failures
to receive” occur, the members’ contingent lists of credits and
debits established at their cages in the Day Branch will not,
of course, agree with the actual credits and actual debits which
are established there by security deliveries actually made. It
is therefore necessary for members failing to deliver or to
receive to notify the Stock Clearing Corporation, so that the
failed transactions can be removed from their records in the
Day Branch. For this purpose, contingent lists of all kinds
are furnished with a perforated strip, upon which the amount
and money value of the failed securities is entered as the Stock
Clearing Corporation is notified concerning them. The strip
can then be torn off the contingent list, and sent to the cage
where the account to which it applies is kept.
