In chapter one we outlined the important dates relating to a regular way transaction for equities. An important part of executing a customer’s order lies in the operational procedures that route the order to the markets and handle trade input functions for the order once it has been executed. The brokerage firm assigns specific departments to handle all of the important functions of trade execution and input. The departments are:

  • Order Room / Wire Room
  • Purchase and Sales Department
  • Margin Department
  • Cashiering Department

Order Room / Wire Room

Once a representative has received an order from a client, the representative must present the order for execution to the order room. The order room will promptly route the order to the appropriate market for execution. Once the order has been executed, the order room will forward a confirmation of the execution to the registered representative and to the purchase and sales department.

Purchase and Sales Department

Once the order has been executed the purchase and sales department inputs the transaction to the customer’s account. The purchase and sales department sometimes called “P & S” are also responsible for mailing confirmations to the customer and for all billing.

Margin Department

All transactions, regardless of the type of account, are sent through the margin department. The margin or credit department calculates the amount of money owed by the customer and the date when the money is due. The margin department will also calculate any amount due to a customer.

Cashiering Department

The cashiering department handles all receipts and distributions of cash and securities. All securities and payments delivered to the firm from clients are processed by the cashiering department. The cashiering department will also issue checks to customers and, at the request of the margin department, will forward certificates to the transfer agent.

Training Materials SecuritiesCE.com

Customer Confirmations

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