The process involves the simultaneous delivery of all documents necessary to give effect to a transfer of securities in exchange for the receipt of the stipulated payment amount.
The market crash of October 1987 drew global attention to potential weaknesses in the standards applied for clearance and settlement.
The report included nine recommendations, one of which was that "Delivery versus payment (DvP) should be the method for settling all securities transactions with systems in place by 1992."
In December 1990, the Committee on Payment and Settlement Systems (CPSS), consisting of representatives from the major central banks, initiated further study of DVP.
Use of such standard message types is intended to reduce risk in the settlement of a financial transaction, and enable automatic processing.