Order Tickets and Confirmations
Every trade requires proper documentation: at the time of entry (order ticket) and after execution (customer confirmation). These records protect both the customer and the firm.
Order Ticket Requirements
Every order must be recorded on an order ticket at the time of entry. Required information includes:
| Field | Details |
|---|---|
| Account number | Customer's account identifier |
| Security symbol/description | Ticker or name of the security |
| Buy or sell | Direction of the order |
| Quantity | Number of shares or bonds |
| Price/order type | Market, limit, stop, etc. |
| Time of entry | When the order was received |
| Time of execution | When the order was filled |
| Solicited or unsolicited | Whether the rep recommended the trade |
| Registered rep ID | The representative handling the order |
Solicited vs. unsolicited: This distinction matters for suitability and supervisory purposes. A solicited trade (recommended by the rep) has greater suitability obligations than an unsolicited trade (initiated by the customer).
Exam Tip: Gotchas
- The order ticket must note whether the trade was solicited or unsolicited. This is a required field, not optional, and directly affects suitability review.
Customer Confirmations
Customer confirmations are governed by FINRA Rule 2232 and SEC Rule 10b-10.
Delivery Timing
- Must be sent at or before the completion of the transaction (settlement date)
Required Disclosures
A confirmation must include:
- Trade date and settlement date
- Security identity (name, CUSIP)
- Quantity (shares or par value)
- Price per share or bond
- Capacity: whether the firm acted as agent (broker) or principal (dealer)
- Commission (if agent) or markup/markdown (if principal)
- Net amount due from or to the customer
- Accrued interest (for debt securities)
Agent vs. Principal on Confirmations
- Agent (broker): Charges a commission, shown as a separate line item on the confirmation
- Principal (dealer): Charges a markup or markdown, built into the price; disclosed per FINRA Rule 2232
Exam Tip: Gotchas
- Confirmations must disclose whether the firm acted as agent or principal. The fee structure differs: commissions are itemized separately, while markups are built into the price.
- Accrued interest must appear on debt security confirmations. The buyer pays accrued interest to the seller in addition to the purchase price.
- Confirmations must be sent by settlement date, not trade date. The rule says "at or before completion of the transaction" (settlement).