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date; (3) settlement date; (4) place of execution; (5) capacity
in which the firm acted; (6) customer’s name and address; (7)
customer’s account number; (8) type of customer account; and (9)
the amount due. Petitioner also encloses a remittance stub and a
return envelope with the confirmation.
The comparison function, which is required by the National
Association of Securities Dealers, Inc., and which generally
begins on the first day following the trade date, is the process
by which customers’ trades are balanced or reconciled against the
opposing brokerage firm’s transactions. This is done through the
clearing facilities of the exchanges where petitioner holds
memberships. In addition to the broker-to-broker comparison,
petitioner also compares the report of execution to its trade
record, which represents the customer’s order.
Petitioner and the clearing facility attempt to resolve
"uncompared trades" (i.e., those trades whose terms do not match
or compare in some respect between petitioner and the opposing
firm) by the next business day following the execution of a
customer order. However, the resolution of open items continues
until all trades are balanced, which may not occur until the
settlement date, to ensure that petitioner is not undergoing any
undue risk. If petitioner has an uncompared trade that was
unreconciled, it will be required to enter the marketplace and
buy or sell to cover the trade.
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Last modified: May 25, 2011