Securities Operations: A Guide to Trade and Position Management

22

Position and Trade Related Operations

Whilst Chapters 10–21 focus primarily on the operational processing of trades, the topics contained within the following six chapters relate to the management of positions, with or without open trades.

For instance, trading positions are created as a result of trading, but the settlement statuses of the trades making up the position are usually irrelevant to this particular type of position.

Additionally, a securities position held by a custodian on behalf of the STO may not have altered during the last three years, as a single purchase that created the position may have settled three years ago, and since there has been no further trading activity in the security. However, the position exists (without any open trades) and numerous operational activities must be performed in relation to that position.

Figure 22.1 Position and trade related operations

Unlike the trade lifecycle that is largely a series of sequential steps, the topics involved in position and trade related operations are typically managed concurrently. The topics covered are represented in Figure 22.1 and are explored within the following six chapters, beginning with the subject of funding and ending with accounting.