All customers must be sent a confirmation at or before the completion of the transaction. Industry rules consider the completion of the transaction to be the settlement date. It is unlawful to settle a transaction without having sent a customer a confirmation of the transaction. If applicable all customer confirmations must include:

  • Customer’s name and account number
  • Account Executive number
  • Description of the transaction i.e. buy or sell
  • Trade date and settlement date
  • Number of shares, bonds, or units
  • Price
  • Yield to the worst for bonds
  • CUSIP Number
  • Amount due or owed
  • Type of account, cash or margin
  • Option specifics (open, closing, covered, uncovered)
  • Location of securities sold
  • Price limits
  • Whether the firm acted as an agent or principal
  • Whether the firm acted as agent for the other side of the transaction “dual agency”
  • Amount of commission or markup or markdown
  • If the firm makes a market in the security
  • If there is a control relationship between the firm and the issuer of the security
  • Information regarding where the transaction was executed
  • If the firm received payment for executing the order with another firm
  • The time of execution or a statement that the time will be furnished upon request
  • Settlement instructions

Clearly Erroneous Reports

If a registered representative reports the execution of a trade to a customer and that report is clearly an error, then that report is not binding on the agent or the firm. The customer must accept the trade as it actually occurred, not as it was erroneously reported so long as the transaction was in line with the terms of their order.

Execution Errors

If a transaction gets executed away from a customer’s limit price or for too many shares of stock, the customer in not obligated to accept the transaction. A registered representative who is informed of an execution error should immediately inform their principal of the error. If a customer makes an error entering the terms of an order over an online trading platform the customer is obligated to accept the execution in line with the terms entered not as intended. The customer in this case should be advised to execute an order to reverse the trade over the online trading portal



Corporate And Municipal Securities Settlement Options

Related Articles
  1. Investing

    Principal Trading and Agency Trading

    Ever wonder what happens behind the scenes when you buy or sell a stock? Read on and find out!
  2. Financial Advisor

    How Brokers Are Compensated for Selling Bonds

    Find out how brokers are paid for selling bonds and how the transaction costs are passed on to the investor through a markup or commission.
  3. Investing

    What Are Transaction Costs?

    Transaction costs are expenses incurred from buying or selling securities.
  4. Personal Finance

    What IRS Form 8949 Is For

    Selling a painting or that lake property? Disposing of your fossil fuel stocks? You need to know about this IRS form.
  5. Investing

    The Importance Of Analyzing Accounts Receivable

    While investors often focus on revenues, net income, and earnings per share, they should not overlook the importance of analyzing accounts receivable.
  6. Trading

    Advanced Guide To MetaTrader 4 - Custom Indicators

    Custom Indicator CreationIndicators are used to analyze past and current price information to help traders predict future price movement. In addition to a wide variety of technical indicators ...
  7. Markets

    Understanding Order Execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
  8. Investing

    Brokerage Functions: Underwriting And Agency Roles

    Learning about these various activities can give insight into how securities are issued and traded.
  9. Financial Advisor

    Be A One-Stop Shop For Your Clients

    Offering comprehensive financial services can bring in business, but coordination is the key to success.
  10. Investing

    The Truth About IRS Tax Settlement Firms

    These companies claim that they can reduce or even eliminate what you owe to the IRS. Find out the facts behind this alluring fiction.
Trading Center