Quick Answer
Trade comparison matches the parties' reported trade details before settlement. Once the details agree, clearing and settlement arrangements support the movement of securities and payment. A clearing broker-dealer, clearing facility, or institutional clearing and settlement arrangement can provide the operational structure for completing a transaction.
A completed trade begins with agreement on its details. Comparison checks that agreement before the settlement process moves securities and money.
Trade Comparison
- Trade comparison: The process of matching the parties' trade details before settlement.
- Comparison result: Shows whether the reported details agree between the parties.
- Comparison → matched details → settlement can proceed.
Exam Tip: Gotchas
- Comparison is not settlement. Comparison asks whether the parties' trade details match; settlement completes the delivery-and-payment obligation.
Settlement Arrangements
- Clearing broker-dealer: Provides clearing and settlement services for a broker-dealer.
- Clearing facility: Provides a facility through which trades are cleared and settled.
- Institutional clearing and settlement arrangement: Provides clearing and settlement arrangements for institutional transactions.
Think of it this way: Comparison is the shared checklist that confirms both parties describe the same trade. The settlement arrangement is the operational channel used after that checklist agrees.