Trade Lifecycle

The GFMI Trade Lifecycle Course

Our Trade Lifecycle Course was designed to provide participants with an overview of the trade lifecycle in fixed income and equity cash securities and emphasizes the functions that occur AFTER the trade has been executed. From the inception of an order, to confirmation, clearing, and settlement, the full lifecycle is covered throughout the course sessions. The roles of industry utilities, such as clearing houses and settlement agencies, for cash securities are highlighted throughout the course.

Trade Lifecycle Course Objectives

By the end of this course, participants will be able to:

• Identify the critical functional areas related to the lifecycle of a trade from the inception of the customer’s order through the settlement, as well as the follow-up required for the effective prevention and management of failed trades
• Recognize the importance of risk management provided by clearing houses
• Discuss how clearing and settlement are structured in both the US and International marketplaces
• Distinguish types of operational risks that have a potential impact on the firm and their customers, in both the domestic and international arenas
• Analyze the source of costs of processing trades
• Gain perspective on the relationship between an institutional customer’s custodian and the bank broker/dealer in the flow of post-execution activity

Course Requirements:
Prerequisites: None
Program Level: Foundation
Advance Preparation: None
Recommended CPE Credits: 7

This course is broken down into six separate sessions:

• Session 1: Equity and Fixed Income Capital Markets begins with an overview of secondary markets for fixed income and equity instruments, including NYSE, NASDAQ, ECN’s and OTC markets for bonds. An examination of the roles played by specialists, market makers, dealers, brokers, and inter-dealer brokers is reviewed, followed by a description of the evolution of electronic trading in the trading of both equities and fixed income products.
• Session 2: Order Management – Broker/Dealers and Clients will detail the various participants in the trade lifecycle, as well as order management for both retail and institutional clients. The flow of an order from an indication of interest, order entry and routing, execution, and the channel of communication back to the client will also be discussed.
• Session 3: Confirmation/Affirmation will focus on the functional narrative of the dialogue between brokers and clients as a follow-up to trade executions. This includes advice of trade details from broker to client, the role of the custodian or agent banks, trade allocations of breakdowns, and the affirmation of trade details from a client or client’s agent back to the broker.
• Session 4: Trade Reporting and Comparison will educate participants in trade reporting and matching between the street-side counterparties to a trade. This session will also give a description of the facilities and systems, such as OCS (Online Comparison System), ACT, and RTTM (Real-Time Trade Matching) that is provided by the NSCC (National Securities Clearing Corporation) and FICC (Fixed Income Clearing Corporation).
• Session 5: Street Side Clearance will review the calculation of settlement date obligations between counterparties and netting facilities provided by the NSCC and FICC. Additionally, this session will cover the Central Counterparty trade guarantee as the linchpin for settlement, as well as each clearing member’s participation in the guarantee funds maintained by each clearing corporation.
• The final session of the course, Session 6: Cashiering and Settlements will cover the exchange of assets, cash, and securities, as the final stage of the trade lifecycle. A description of the settlement infrastructure in the U.S. markets, including the roles played by the DTCC and the Fed, and the responsibilities of the broker/dealer, custodian, and client are also included.

Contact us at +1-516-935-0923 or [email protected] for additional information on this course and to download our full course catalog!