Trade Lifecycle

What is Trade?

Trade

Trade is exchange of financial securities and products like stocks, bonds, commodities,
currencies and derivatives or any other valuable financial instrument for cash and as a
promise to pay the stated currency in the respective country of exchange

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Trade Life-Cycle

Sale

• This is a process of client acquisition in

which HNIs or Institutional clients
are introduced to various investment
products or vehicles.
• These vehicles or products are available
with an Investment Manager or
Bank by whom the client’s investments
are managed.
• The investments are collectively called a
Mutual or a Hedge fund.

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Trade Life-Cycle

Trade Initiation and Execution

• This is the process of placing an order in
the market.
• Trade Initiation and Execution can be
done both at Order and Quote driven
markets.
• This depends on the choice of market
place and on the external platform.
• Once order is placed and it gets
matched, the trade is said to
be executed.

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Trade Life-Cycle

Trade Capture
• Trades are then booked internally in a
FO system for it to flow down to
the operation systems.
• It is booked in a Risk Management
System (RMS)

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Trade Life-Cycle

Trade Validation and Enrichment

Reference data team sets up the static and
dynamic details which helps middle office
teams to validate the trade, before releasing
instructions into the market.
Repository for data management

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Trade Life-Cycle

Trade Confirmation
• This is an extremely critical step for the
trade settlement.
• Trade details and SSIs are agreed with
counterparty at least a day prior to
settlement date.
Confirmation via depositories like Euro
clear/DTCC

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Trade Life-Cycle

Trade Settlement
• This is the process of simultaneous
exchange of cash versus securities for a
security trade or cash versus cash for a
Derivative trade.

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Trade Life-Cycle

Reconciliation
Reconciliation involves matching ledgers
against statements to ensure correct
accounting of all trade booked.

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Trade Life-Cycle

Trade Process Overview within Investment Bank

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Trade Life-Cycle

Trade Settlement

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