Welcome to Trade Reporting and Corrections, where accurate transaction reporting, sound order handling, and prompt correction controls protect customers and market integrity.
Exam Weight: 2 of 35 in Function 1 (4% of exam)
What You'll Learn
In this unit, you'll cover:
- Trade reporting systems: How executed transactions are reported, and why reports and quotations must be accurate.
- Best execution, capacity, and quotations: The customer-order duty, agent versus principal capacity, and firm quotation obligations.
- Trader corrections: How as/of and past-settlement-date corrections identify the relevant dates.
- Error accounts: How a firm isolates and controls a trading error while addressing it.
- Prohibited trading activities: Trading ahead, excessive trading, manipulation, markups, improper payments, breakpoint sales, and profit-and-loss sharing.
Why This Matters
Operations professionals support the record, correction, and control processes behind a transaction. Exam questions often turn on a small distinction: whether a firm acted as agent or principal, whether the original trade date or settlement status controls, or whether conduct involved a block transaction versus a customer order.
Let's start with the systems and accuracy standards that create the official record of an executed trade.