Value date - Financial definition
Financial acronyms
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Concise definition of the term value date
Date on which a transaction in the financial markets is deemed to be effective. It is also the date on which the counterparties agree to fulfill their contractual obligations by exchanging assets and ownership rights.
Comprehensive definition of the term value date
The events taking place on value date depend on the type of transaction which has been negotiated.
For bonds and shares, for example, the value date will be the date on which the securities and the rights pertaining to them will be transferred to the buyer, and the payment for their acquisition made to the seller.
For certain derivatives contracts like swaps and FRAs, the value date will be the date on which the contract will take effect, meaning that interest will start to accumulate.
The number of days between the transaction date, which is the date on which a deal has been negotiated, and the value date is generally subject to market conventions for each type of transaction. In many cases, however, a different value date can be agreed upon between the two contracting parties.