Quick Answer
A don't know (DK) trade occurs when a party does not recognize or accept the reported trade details, and a DK notice addresses that dispute. A securities fail is a required-delivery failure. When the fail remains outstanding, it becomes an aged securities fail that requires confirmation.
Not every settlement problem is the same. A DK trade challenges the reported trade details, while a fail concerns required securities delivery.
Don't Know Trades
- Don't know (DK) trade: A trade for which a party does not recognize or accept the reported trade details.
- Don't know notice: A notice used in connection with a DK trade.
- A reported trade that is not recognized or accepted → DK trade → DK notice.
Exam Tip: Gotchas
- A DK trade is about whether a party recognizes or accepts the reported trade details. It is not a delivery failure.
Aged Securities Fails
- Securities fail: A settlement failure involving the required delivery of securities.
- Aged securities fail: A securities fail that remains outstanding and requires confirmation.
- Required delivery not made → securities fail; fail remains outstanding → aged securities fail requiring confirmation.
Exam Tip: Gotchas
- An aged securities fail is still a delivery problem. Its distinguishing feature is that it remains outstanding and requires confirmation.