A securities settlement instruction is the message by which a party to a trade, or its custodian, tells a settlement agent or central securities depository to deliver or receive securities. It is the securities-specific form of a settlement instruction. It states the security, normally by ISIN, the quantity, the trade and settlement date, the cash amount and currency, the accounts and agents of both sides, and whether the transfer is delivery versus payment or free of payment.
Each side sends its own instruction, and the two must agree before settlement can take place, a step described under settlement instruction matching. On the SWIFT network the standard forms are the MT 540 to MT 543 messages, covering receipt or delivery, free or against payment, with ISO 20022 equivalents used by newer platforms. Instructions that are late, incomplete or inconsistent with the counterparty's are the most common cause of failed settlement.