What does Client trade, market trade, and legal movement describe?
|------------------ Client Trade ------------------------------------|| | Client ------– Contracting Entity ------ Intermediately Entity –---- Executing Entity –----------- Market| ----LegalMovement ---- | -----LegalMovement ---- | -----LegalMovement------ | |
|--- Market Trade -------|
Example, Client Buy; MSEU-SG-Agency,
Flow of stock: Client <- MSEU <- MSL <- MSSG <- SGX
Legal Chain: MSSG (executing) -> MSL (intermediary) -> MSEU (contracting)
Forward / Reverse legal movement: if a legal movement follows the legal chain, it’s forward; otherwise it’s reverse.
First Entity / Second Entity:
* in any trunk in the legal chain, the first entity is before the second entity in the trunk.
* given a pair of first/second entity, we can generate two legal movement. One forward, one reverse.
Charges pass through (legal movement rules, always follows the second entity in the legal chain)
So in short, charge pass through rules
* DO NOT follow the legal entity in a legalmovent.
* Follows the Second Entity in the legal chain; and it always appears in pairs --- as first-second entity appears in pairs.