On Tuesday, May 12, a retail investor purchases corporate bonds through a broker-dealer that fills the order in an agency capacity. Under FINRA and SEC rules, on which date will regular-way settlement take place, and how must the firm's role and remuneration be disclosed on the trade confirmation?
- Settlement occurs on Wednesday, May 13, and the confirmation must state that the firm acted as an agent and disclose the commission charged.Cevap
- BSettlement occurs on Thursday, May 14, and the confirmation must state that the firm acted as an agent and disclose the commission charged.
- CSettlement occurs on Wednesday, May 13, and the confirmation must state that the firm acted as a principal and disclose the mark-up assessed on the trade.
- DSettlement occurs on Wednesday, May 13, and the confirmation must indicate that custody and depository safekeeping of the bonds are maintained by the National Securities Clearing Corporation (NSCC).
Cevap
Settlement occurs on Wednesday, May 13, and the confirmation must state that the firm acted as an agent and disclose the commission charged.
Regular-way settlement for corporate bonds occurs on the next business day following the trade date (), making the settlement date Wednesday, May 13. Under FINRA Rule 2232, the confirmation must disclose the capacity in which the broker-dealer acted; when acting in an agency capacity, the firm must disclose that role and state the exact commission charged.
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Regular-Way Settlement (T+1) and Trade Confirmation Capacity Disclosures
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