ba - error/custody Trade

Error Trade shape and position keeping

Error trade occurs when FO executed something not according to the client order, and client refuse to accept the order.

MO then book the market executions to a Client Trade to with TA = Error Desk.

These Client Trade will later be balanced (reversed) by a Agency Trade to the market.

Stock position of error trade should be cleared in the same day.

This is different from the normal stock positions generated from the principal business, where we buy and sell to profit.

What is a Custodian Trade?

We issue custodian to our clients, such that after client buy from market, we hold the stock on behalf of client.

The open position that we hold on behalf of client is called custodian position.

These stocks are kept in our depository accounts.

How is Error Trade linked to Custodian Trades?

In Syn~, positions of Error Trades are not treated as Firm Position, as the stock position for these trades are not for principal business.

They are instead tracked as Custody Positions, and should always be zero at EOD.

The Agency Business division issues custodian service to the Dealing Error desk of the firm.

The regulatory requirement on principal stock position and custodian stock position are different, and hence the reconciliation requirements are different.

What is needed to keep position for Error Trade?

1. CDB: Tag the stock SSI as Custody SSI of the Dealing Error TA.

2. CDB: Tag Reporting Entity on Interco TA (of the Agency Desk) to be the same as the RE of executing entity of the client trade, so that the Firm Position will be prohibited in SYN.

3. SYN: Setup SSI rules to enable Custody Trades on given markets.

4. SYN: Setup Depo account for the Dealing Error TA, and enable the safeCustody flag on it.

5. SYN: Setup TA-Depo Custody Relationship account using dataload.