# kaal:claim:3411110-016

**Claim.** Instant settlement destroys an existing business practice: without the T+3 grace period, institutional investors can no longer lend idle shares to investors covering short positions.

**Type.** failure  **Support.** argued

**Holds when.**

- blockchain based settlement without a grace period

**Source quote.**

> Without this grace period in a blockchain-based settlement system, institutional investors will no longer be able to lend their idle shares to investors to cover short positions.

**From.** Wulf A. Kaal, Samuel Evans, *Blockchain-Based Securities Offerings* (2019), III.4 Impact on Traditional Market-Participants, page 18

**Cite as.** Wulf A. Kaal, Samuel Evans, Blockchain-Based Securities Offerings (2019). SSRN: https://ssrn.com/abstract=3411110

**Verify.** sha256 of source PDF `c7626eeb7642045b79f8745df1f7232a8fe8bc44a1f7e87b592850e35b392b50` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Evans%20-%202019%20-%20Blockchain-Based%20Securities%20Offerings.pdf

**Failure mode.** loss of the settlement grace period  (family: transition-and-migration-risk)

**Topics.** securities-law, defi, economics

**Keywords.** securities-lending, short-selling, instant-settlement, market-practice

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