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. Small Business

    What's Involved in Customer Service?

    Customer service is the part of a business tasked with enhancing customer satisfaction.
  2. Investing

    What is a Settlement Date?

    A settlement date is the day a security trade must be settled.
  3. Investing

    What Are Transaction Costs?

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

    Basics Of The Mechanics Behind Electronic Trading

    What was once associated with shouting traders and wild hand gestures has now become more closely associated with statisticians and computer programmers.
  5. Investing

    Understanding Related-Party Transactions

    In business, a related-party transaction refers to a transaction where parties on both sides have a common interest or relationship.
  6. Financial Advisor

    FINRA Rule 2273: Your Recruiting Questions Answered

    An in-depth look at and Q&A on FINRA's new recruiting practices rule, which goes into effect in November.
  7. Financial Advisor

    Variable Prepaid Forward Contract: Scam Or Safety Net?

    Top executives can benefit from this kind of contract, but is it at the expense of the shareholders?
  8. Investing

    What is Accounting?

    Accounting is the recording of financial transactions of a business or organization. It also includes the process of summarizing, analyzing and reporting these transactions in financial statements.
  9. Insurance

    Brokerage Functions: Underwriting And Agency Roles

    Learning about these various activities can give insight into how securities are issued and traded.
  10. Investing

    How Much Cheaper are Bitcoin Fees than Credit Card Fees?

    Bitcoin transaction fees are starting to rise as the network gets backlogged due to more usage, but are still much lower than typical credit card fees.
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center