Trade Life Cycle From the Trade Origination to the Settlement Trading Trade Origination / Order Origination Trade Execution Operations Trade Validation Trade Confirmation Clearing Settlement

Systematic Trade Flow

Order Origination Orders are received from Clients, or by Sales Trader by phone or electronically. New orders are entered into the system(Trading System)Sales Department Also known as Sales Traders are responsible for all client communications, market new securities and supply informationOrder Room Collect Orders from Sales Traders and responsible for execution of orders Use various avenues to execute the orders Exchange OTC Internal inventory / Trader Book etc

Additional Function- Reconcile orders with execution reports, verify executions and their typesInform Clients if any open door.Follow industry regulations and compliance rules.

Purchase/Sale Involves recording, comparing, confirmation, booking.

Clearing Follows comparison, clearing agency issues bond contract to both the parties which both parties accept.(NSCC)

Confirmations EOD, all trading details/transactions are mailed to the client

Books- Orders are processed into firms books. Updated client positions, financial accounts and firms records and financials.

Straight Through Process(STP) Electronically processing the trade without manual intervention. Errors in processing separated and handled manually

Settlement Timings Total time taken to process the trade after the trade date T+0 Same day settlement (trade day) T+1 One day after the trade day T+2 Two days after the trade day T+2 Three days after the trade day

Custodians Holds Funds and stocks of clients. Depository Trust & Clearing Corporation.

Commercial Bank Lend money to broker firms, underwriting of books, act as custodians for institutions.

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