clearing procedures and securities markets(1)

Most securities are sold the"regular way." which requires delivery of certificates within five business days. On rare occasions a sale may be made as a "cash"transaction,requiring delivery the same day,or as a "seller's option,"giving the seller the choice of any delivery day within a specified period (typically,no more than 60 days).
It would be extremely inefficient if every security transaction had to end with the physical transfer of certificates from the seller to the buyer. On a given day, a brokerage firm might sell 500 shares of American Telephone and Telegraph stock for Mr. A and buy 300 shares for Ms. B. Mr.A's 500 shares could be delivered to the buyer's broker,and Ms. B's 300 shares obtained by accepting delivery from the seller's broker. but it would be much easier to transfer 300 of Mr. A's shares to Ms. B,send the other 200 to the first broker,and instruct the second broker to deliver the 300 shares directly to the first broker. This would be especially helpful if the firm's clients maintained their securities in street name. for the 300 shares kept within the firm would not have to be moved or have their ownership transferred on the books of the issuing corporation.