Formal recording of trade : Trade capturing

All executed bond trades must be formally recorded. In case of electronic communication , these details are automatically captured.

Details of Trade execution
There can be various things involved in it:

• Type of instrument
• Price
• Transaction : buy or sell
• Counterparty details
• Trade date and time and value/settlement date

Identification of bond/equities
Now the Bonds can be identified by unique in-house number or globally used 12-character alphanumerical code called ISIN number.
In it 1st 2 characters imply country eg. US for US bonds, XS for Eurobond
Next 9 characters represents national securities identification number.
Last character verifies the code.
Security identifier are stored as static data repository.

Flow of trade capturing
1. Trade execution - which is done in the front office.
2. Reconciliation - This is done to check if all the trading details have arrived in the back office from the front office. If some trade details is missing, they are requested again.
3. Validation - Validation of trade is done. If something is invalid is found it is dealt with manually. These are dealt with 'exception'.
4. Settlement - Once all the above steps are done, settlement is fixed and assigned a reference number in the settlement system.