Aged Fail

AAA

DEFINITION of 'Aged Fail'

A contract between two broker-dealers that has not been settled within 30 days of the settlement date. Aged fails typically occur when a security is undelivered due to the failure of the selling client to deliver the security to his or her broker; the broker is then unable to deliver the security to the buying broker. This typically results in the receiving firm having to adjust its books accordingly, to account for the asset not being received.

BREAKING DOWN 'Aged Fail'

Since brokers are continually buying, selling, receiving and delivering, a fail position may refer to a net delivery position where one broker owes more securities to other brokers on sell transactions, than are owed to the broker for buy transactions. According to U.S. Securities and Exchange Commission (SEC) regulations, parties failing to deliver cash or securities to settle a transaction in a timely fashion are subject to specific charges.

RELATED TERMS
  1. Clearing House

    An agency or separate corporation of a futures exchange responsible ...
  2. Trade Date

    The month, day and year that an order is executed in the market. ...
  3. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  4. Fail

    In common trading terms, if a seller does not deliver securities ...
  5. Settlement Date

    1. The date by which an executed security trade must be settled. ...
  6. Turnkey Property

    A fully renovated home or apartment building that an investor ...
Related Articles
  1. Economics

    Inside National Payment Systems

    Investopedia explains: The global interconnection of U.S. payment systems makes commerical and financial transfers possible.
  2. Investing Basics

    Principal Trading and Agency Trading

    Ever wonder what happens behind the scenes when you buy or sell a stock? Read on and find out!
  3. Options & Futures

    The 4 Ways To Buy And Sell Securities

    Know the four main avenues of buying and selling investment instruments.
  4. Options & Futures

    An Introduction To Managed Futures

    Their inverse correlation with stocks and bonds make these alternative investments worth getting to know.
  5. Bonds & Fixed Income

    Auction Rate Securities: Bidding On The Long Run

    These investments do better with a long-term horizon. Should you buy them before they're going, going, gone?
  6. Brokers

    Broker-Dealer Industry 101: The Landscape

    Independent broker-dealers are a great choice for experienced, self-starter planners who have established practices.
  7. Brokers

    Explaining Market Orders

    A market order is the most common order used to purchase a financial security.
  8. Term

    What is Financial Technology?

    Financial technology, or fintech, is a financial services sector that emerged in the 21st century.
  9. Investing Basics

    What's a Brokerage Account?

    A brokerage account is a contractual arrangement between an investor and a licensed securities broker or brokerage.
  10. Entrepreneurship

    Risks Associated With Government Contracts

    Government contracts can be rewarding, but they also come with a variety of risks.
RELATED FAQS
  1. What is the interest rate offered on a typical margin account?

    Interest rates on margin accounts vary according to the size of the loan and the brokerage firm being used. Generally, interest ... Read Full Answer >>
  2. What is the cost of a share purchase?

    When investors purchase shares of stock, the price paid includes two components: the price of the stock and the fee charged ... Read Full Answer >>
  3. What is the difference between fee-based advisors and commission-based advisors?

    The difference between a fee-based adviser and a commission-based adviser is that the former collects a flat fee for investment ... Read Full Answer >>
  4. What is the difference between a custodian bank and a mutual fund custodian?

    Custodian banks and mutual fund custodians, commonly known as mutual fund corporations, perform very similar roles for different ... Read Full Answer >>
  5. How does an insurance broker make money?

    An insurance broker makes money off commissions from selling insurance to individuals or businesses. Most commissions are ... Read Full Answer >>
  6. What does the variance between the bid and ask price of a stock mean?

    The variance between a security's bid price and its ask price, also known as the bid-ask spread, represents the different ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  2. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  3. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
  4. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
  5. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  6. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!