David M. Weiss

After the Trade Is Made, Revised Ed. (eBook, ePUB)

Processing Securities Transactions

• Format: ePub

Produktbeschreibung

The fully updated classic guide to the mechanics of securities processing—a must for professional investors This third edition of After the Trade Is Made reflects the changes that have taken place in recent years as a result of new products, technological breakthroughs, and the globalization of the securities industry. Comprehensive and easy to understand, it provides brokers, operations personnel, and individual investors with definitive and up-to-the-minute explanations of each step in the trading process—from the moment a customer decides to buy or sell a security through the final requirements of record keeping.

Written for both securities professionals and individual investors, whether domestic or in other countries, this new edition clearly explains the core of underwritings, new and established trading markets, transaction processing, margin, and more—while providing critical insights into the most recent wave of industry changes.

David M. Weiss, a veteran securities professional, traces the entire process of buying or selling a security, from order management to transaction processing to the final posting on the firm's books and records. He covers the specialized attributes of each function in a typical brokerage firm, as well as their relationships with commercial banks, transfer agents, clearing corporations, and depositories.

After the Trade Is Made is the definitive resource for anyone eager to understand and confidently navigate the vast and often surprising world of securities.

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Produktdetails

• Verlag: Penguin Publishing Group
• Seitenzahl: 544
• Erscheinungstermin: 17. August 2006
• Englisch
• ISBN-13: 9781440623790
• Artikelnr.: 44656821

Autorenporträt

David M. Weiss has been active in the brokerage industry for more than thirty-five years. Currently an independent consultant and lecturer, he was formerly the director of business, industry, and product training for a major international investment bank, vice president of new products for a primary marketplace, and chief operations officer of a broker dealer as well as holding other management positions.

Inhaltsangabe

After The Trade Is Made, Revised Ed.Preface Chapter I. Overview of the Industry I
A. Broker/Dealers I
A
1. What Are Broker/Dealers? I
A
2. What Are the Types of Broker/Dealers? I
A
3. What Are the Component Parts of a Typical Broker/Dealer? I
A
3
a. Front Office I
A
3
b. Middle Office I
A
3
c. Back Office I
A
3
d. Other Key Components I
B. The Markets I
B
1. What Are Markets? I
B
2. What Is a "Two
Sided" Market? I
B
3. The Different Marketplaces I
C. Industry Regulators I
C
1. Who Are the Regulators? I
C
1
a. Securities and Exchange Commission I
C
1
b. State Regulators I
C
1
c. Self
Regulatory Organizations (SROs) I
C
1
d. The Commodities Futures Trading Commission I
C
1
e. Other Regulators I
D. Required Examinations I
E. Regulatory Reporting I
E
1. Net Capital I
E
2. Customer Protection I
E
3. FOCUS I
F. Who Are Our Clients? I
F
1. Clients Who Provide Product I
F
2. Types of Clients I
F
3. Main Categories of Clients I
F
4. Types of Accounts I
G. What Are The Industry Organizations? I
G
1. Depositories I
G
2. Clearing Corporations I
G
3. Industry Utilities I
G
4. Banks I
G
5. The Bond Market Association (TBMA) I
G
6. Security Industry Association (SIA) Chapter II. Products That We Offer II
A. Corporate Securities II
A
1. Common Stock II
A
1
a. Voting II
A
1
b. Dividends II
A
1
c. Underwriting II
A
1
d. Trading of Common Stock II
A
1
e. Common Stock as an Investment Vehicle II
A
2. Preferred Stock II
A
2
a. Dividends II
A
2
b. Underwriting II
A
2
b
i. Dividend Rate II
A
2
b
ii. Cumulative and Noncumulative Dividends II
A
2
b
iii. Callable II
A
2
b
iv. Convertible II
A
2
b
v. Participating II
A
2
b
vi. Adjustable
Rate Preferred II
A
2
b
vii. Reverse Floating Rate II
A
2
b
viii. Putable Preferred II
A
2
b
ix. Self
Liquidating Preferred II
A
2
c. Summary of Preferred II
A
3. Rights and Warrants II
A
3
a. Rights II
A
3
a
i. Cum Rights II
A
3
b. Ex
Rights II
A
3
c. Arbitrage II
A
3
d. Warrants II
A
3
e. The Certificate II
A
4. Corporate Bonds and Notes II
A
4
a. Payment of Interest II
A
4
b. The Marketplace II
A
4
c. Pricing of a Corporate Bond II
A
4
c
i. Accrued Interest II
A
4
d. Bond Ratings II
A
4
e. Indenture II
A
4
f. Retiring Bonds II
A
4
g. Bond Security II
A
4
g
i. Mortgage Bonds II
A
4
g
ii. Collateral Trust Bonds II
A
4
g
iii. Equipment Trust Bonds II
A
4
g
iv. Debenture Bonds II
A
4
h. Registration II
A
4
i. Default II
A
4
j. Other Bond Features II
A
4
j
i. Callable Bonds II
A
4
j
ii. Convertible Bonds II
A
4
j
iii. Zero
Coupon and Floating
Rate Bonds II
A
4
k. Bonds and Notes Summary II
A
5. Commercial Paper II
A
5
a. Issuance II
A
5
b. Trading II
A
5
c. Settlement II
A
5
d. Handling the Certificates II
A
5
e. Financing II
A
5
f. Maturity II
B. Municipal Securities II
B
1. The Competitive Underwriting II
B
2. Offering of Municipal Bonds II
B
3. The Effect of Income Tax Rates II
B
4. Municipal Bonds II
B
4
a. Trading Municipal Bonds II
B
4
b. Basis Pricing II
B
4
c. Types of Municipal Bonds II
B
5. Municipal Notes II
B
6. Municipal Securities Summary II
C. U.S. Treasury Instuments II
C
1. The Fed Auction II
C
2. U.S. Treasury Bonds and Notes II
C
3. Treasury Strips II
C
4. U.S. Treasury Bills II
C
5. Settlement II
C
6. U.S. Treasury Instruments Summary II
D. Mortgage
Backed and Asset
Backed Securities II
D
1. Role of Mortage Banker II
D
2. TBAs/Forwards II
D
3. Modified Passthroughs II
D
4. Collateralized Mortgage Obligations (CMOs) II
D
5. Interest Only/Principal Only II
D
6. Puts, Calls, and Standbys II
D
7. Asset
backed Securities (ABSs) II
E. Bank
issued Securities II
E
1. Bankers' Acceptances (BAs) II
E
1
a. Use in Importing II
E
1
b. Trading II
E
2. Certificates of Deposits (CDs) II
E
2
a. Types of CDs II
E
2
b. Trading II
E
2
c. Interest II
E
3. Asset
backed Securities and Private Label II
F. Mutual Funds II
F
1. Open
and Closed
End Funds II
F
2. Net Asset Value versus Market Value II
F
3. Load versus No
Load II
F
3
a. Load Funds II
F
3
b. No
Load Funds II
F
3
c. ABC Funds II
F
3
d. Quotes II
F
4. Rule 12b
1 II
F
5. Bond Units II
F
6. Money Market Funds II
F
7. Mutual Funds Summary II
G. Exchange
Traded Funds (ETFS) II
G
1. Types of ETFs II
G
2. How They Are Named II
G
3. Characteristics of ETFs II
H. Hedge Funds II
H
1. Goals of Hedge Funds II
H
2. Pricing Hedge Funds II
I. Options II
I
1. Listed versus OTC Options II
I
2. American versus European Forms II
I
3. Equity Options II
I
4. Debt or Interest Rate Options II
I
4
a. U.S. Treasury Bill Options II
I
4
b. U.S. Treasury Note and Bond Options II
I
5. Index Options II
I
6. Foreign Currency Options II
I
7. Settlement II
I
8. Option Clearing Corporation (OCC) II
I
9. Expiration II
J. Futures and Forwards II
J
1. Futures Contracts II
J
1
a. Types of Futures Contracts II
J
1
b. Settlement II
J
1
c. Margin II
J
1
d. Margin Requirements II
J
1
d
i. Clearing Corporation Margin Requirements II
J
1
d
ii. Brokerage Firm Margin Requirements II
J
1
e. Types of Margin II
J
1
f. Delivery II
J
1
g. Daily Trading Limits II
J
2. Forward Contracts II
K. Swaps II
K
1. Interest Rate Swaps II
K
2. Currency Swaps II
K
3. Commodity Swaps II
K
4. Swaps Summary II
L. Currency II
L
1. What Is Foreign Exchange (FX)? II
L
2. Users of the Market II
L
3. Derivatives II
L
4. Settlement II
M. American Depositary Receipts (ADRs), American Depositary Shares (ADSs), and Global Depositary Receipts (GDRs) II
M
1. American Depositary Receipts and Shares II
M
2. Global Depositary Receipts II
N. Restricted Stock II
N
1. Rule 144 Stock II
N
2. Rule 145 Stock II
N
3. Rule 144A Stock II
O. Summary of Investment Products Chapter III. The Marketplaces and Order Management III
A. The Market III
A
1. Agency Transaction III
A
2. Principal Transaction III
B. Order Routing III
B
1. Retail Order Entry III
B
2. Institutional Order Entry III
B
3. Order Requirements III
B
4. The Quote III
B
5. The Size III
B
6. Time Constraints of Orders III
B
6
a. Day Order III
B
6
b. Good Through (GTC, GTM, GTW, and so on) III
B
7. Type of Orders III
B
7
a. Market Order III
B
7
b. Limit Order III
B
7
c. Short Sales III
B
7
d. Stop Orders III
B
7
e. Stop Limit Order III
B
7
f. Fill or Kill (FOK) Order III
B
7
g. Immediate or Cancel (IOC) Order III
B
7
h. All or None (AON) Order III
B
7
i. Not Held (NH) Order III
B
7
j. At the Opening Orders III
B
7
k. On the Close Orders III
B
7
l. Spread Orders III
B
7
m. Straddle Orders III
B
7
n. Combination Orders III
B
7
o. One
Cancels
the
Other (OCO) Order III
B
7
p. Facilitation Order III
B
8. Conclusion III
C. The Exchanges III
C
1. Types of Exchanges III
C
2. The New York Stock Exchange III
C
2
a. House Brokers III
C
2
b. Independent Brokers III
C
2
c. Specialists III
C
2
c
i. Making Markets III
C
2
c
ii. Executing Orders III
C
2
d. The Crowds on the Floor III
C
2
e. The Auction Market III
C
2
f. Priority, Precedence, and Parity III
C
2
f
i. Priority III
C
2
f
ii. Precedence III
C
2
f
iii Parity III
C
2
g. The Specialist's BookIII
C
3. The American Stock Exchange (AMEX) III
C
4. Chicago Board Option Exchange III
C
4
a. Opening Rotation III
C
4
b. The Floor III
C
4
c. Executing Orders III
C
4
c
i. Time and Date Entered III
C
4
c
ii. Buy or Sell III
C
4
c
iii. Open or Close III
C
4
c
iv. Quantity, Type, Class, and Series of Option III
C
4
c
v. Customer, Firm, Market Maker/Specialist III
C
4
c
vi. Firm Name or Designation III
C
5. The International Security Exchange III
C
6. The Future Exchanges III
D. The Over
The
Counter (OTC) Market III
D
1 NASDAQ III
D
1
a. NASDAQ Systems III
D
1
a
i. SOES III
D
1
a
ii. ACES III
D
1
a
iii. CAES III
D
2. Other Over
the
Counter Equity Markets III
D
2
a. Bulletin Board Securities III
D
2
b. Electronic Commerce Networks (ECNs) and Alternate Trading Systems (ATSs) III
D
3 The Debt Market III
D
3
a. The Corporate Bond Market III
D
3
b. The Municipal Bond Market III
D
3
c. The Treasury Market III
D
3
d. The Mortgage
Backed and Asset
Backed Securities Markets III
D
3
e. Money Market Instruments III
D
4. The Derivative Market III
D
4
a. Options III
D
4
b. Forwards III
E. The Third Market III
F. The Fourth Market III
G. Odd Lots Chapter IV. The Trade
Processing System IV
A. Order Management System IV
B. Client Account Control IV
B
1. New Accounts/Name and Address IV
B
1
a. New Account Form IV
B
1
a
i. Terms and Conditions IV
B
1
a
ii. Client Information IV
B
1
a
iii. Standing Instructions IV
B
1
a
iv. Type of Account IV
B
1
a
v. Client's Signature Block IV
B
1
b. Types of Accounts IV
B
2. Client Master Database Information Gathering IV
B
2
a. Data Entry (NAOW) IV
B
2
b. Automated Client Account Transfer System (ACATS) IV
B
2
c. Account Opening Procedure IV
B
2
d. Account Maintenance IV
B
2
e. Institutional Accounts/SID/ALERT IV
C. Security Properties Control IV
C
1. Security Master Database IV
C
2. Security Master Database Information Gathering IV
D. Coding IV
D
1. Unique Number IV
E. Trade Figuration IV
E
1. Agency versus Principal Transactions IV
E
2. Regualtory Fee IV
E
3. Equity Trade Figuration IV
E
4. Bond Figuration IV
E
5. Money Market Instruments IV
F. Comparison IV
F
1. Order Management System IV
F
2. Equity Comparison IV
F
3. Workings of the Clearing Corporation IV
F
3
a. National Securities Clearing Corporation IV
F
3
a
i. Principal Transactions IV
F
3
a
ii. Market
Maker Trades IV
F
3
a
iii. Agency Transactions IV
F
3
a
iv. Principal Transactions (Modified) IV
F
3
b. Equity Transaction Comparison IV
F
3
b
i. What Is Being Compared? IV
F
3
b
ii. Types of Comparison IV
F
3
c. Regular Way Contract IV
F
3
d. Trade Reporting and Compliance Engine (TRACE) Comparison IV
F
4. Netting IV
F
5. Continuous Net Settlement (CNS) IV
G. Balancing of The Customer Side IV
H. Fixed
Income Clearing Corporation IV
H
1. Forwards and TBAs IV
H
2. Mortgage
Backed Security Division of Fixed Income Clearing Corporation IV
H
2
a. The Allocation IV
H
3. Government Security Division of Fixed Income Clearing Corporation (GSD) IV
I. Options IV
I
1. OTC Options Comparison IV
I
2. Listed Option Comparison IV
I
2
a. ROTNs IV
I
3. Posistion Reconcilement IV
I
4. Option Exercise IV
I
5. Ex by Ex IV
J. Futures Comparison IV
K. Trade Confirmation Chapter V. Margin V
A. Cash Versus Margin Purchases V
B. Terminology V
C. Cash Account V
D. Margin Account V
E. A Brief Lesson In Margin V
E
1. Regulation T ("Reg T") V
E
2. Maintenance Rules V
E
3. Loan Value V
E
4. Margin Excess and Buying Power V
E
5. Minimum Maintenance Requirement V
E
6. Restricted Accounts V
E
7. Special Memorandum Account (SMA) V
F. MarginLong Position V
F
1. Reg T Excess V
F
2. Buying Power V
F
3. Minimum Maintenance Requirement V
F
3
a. A Working Illustration V
G. MarginShort Sales V
G
1. Required Margin V
G
2. Mark to the Market V
G
3. Maintenance Requirement V
H. Maintenance Excess V
I. Day Trading V
J. The Margin/Credit Department as Part of Client Relationship Management V
J
1. Account Maintenance V
J
2. Sales Support V
J
3. Clearance for Issuance of Checks V
K. Margin Department's Daily Routine V
K
1. Reports to Produce V
K
1
a. Exception Report V
K
1
b. Items Due V
K
2. Extensions V
K
3. Close
Outs V
K
4. Delivery of Securities V
K
5. The Margin/Credit Workstation V
L. Option Margin V
L
1. Option Margin Theory V
L
2. Margin Calculation for an Uncovered Equity Option V
L
3. Margin for Spread Positions V
L
4. Margin for Straddle or Combo Positions V
M. Future Margin V
M
1. Standard and Maintenance Margin V
M
2. Mark to the Market V
M
3. Variation Margin V
M
4. Delivery and Payment V
M
5. Standard Portfolio Analysis of Risk (SPAN) Margin Chapter VI. Settlement VI
A. Segregation (SEG) VI
B. Receive and Deliver VI
B
1. Preparation for Settlement VI
B
2. Settlement Cycle Begins VI
B
2
a. The Projection Report VI
B
2
b. The Seg Report VI
B
2
c. Seg Control VI
B
2
d. Needs Analysis Report VI
C. Fail To Receive/Fail To Deliver VI
D. Financing Positions VI
D
1. Bank Loan VI
D
2. Stock Loan VI
D
3. Stock Borrows VI
D
4. Repos VI
D
4
a. Government Security DIvision (GSD) of FICC GCF Repo Service VI
D
4
b. Matched Book VI
D
5. Letters of Credit VI
D
6. Unsecured Loans VI
E. Custodial Services VI
E
1. Safekeeping VI
E
2. Customer Seg VI
E
3. Exemptions VI
F. Settlements of Mortgage
Backed Securities VI
F
1. GNMA Passthrough Securities VI
F
2. Electronic Pool Notification (EPN) VI
G. Settlement with GSCC and The FED VI
H. Option Settlement VI
H
1. Daily Activity Settlement VI
H
2. OCC Margin VI
H
3. Expiration VI
I. Institutional Settlement VI
I
1. Trade Suite, OASYS, Omgeo VI
I
2. Alert and SID VI
J. Mutual Fund Settlement VI
J
1. Clearance VI
J
1
a. Closed
End Fund Transacton Clearance VI
J
1
b. Open
End Fund Transaction Clearance VI
J
2. Acquiring Fund Shares VI
J
2
a. FundServ VI
J
2
b. Mutual Fund Profile Service (MFPS) VI
J
2
c. ACATS/FundServ VI
J
3. Defined Contribution Chapter VII. Custodial Services VII
A . Automated Customer Account Transfer Systems (ACATS) VII
B. Transfers VII
C. Standing Instructions VII
D. Dividends and Bond Interest VII
E. Corporate Actions (AKA Reorganizations) VII
E
1. Mergers VII
E
2. Acquisitions VII
E
3. Tender Offers VII
E
4. Stock Splits VII
E
5. Reverse Stock Splits VII
E
6. Spinoffs VII
E
7. Processing Corporate Actions Chapter VII. Role of the Banks VIII
A. Custodian VIII
B. Financing VIII
B
1. Collateralized Loans and Hypothecation VIII
B
2. Letters of Credit VIII
B
3. Lines of Credit VIII
C. Transfer Agent VIII
D. Registrar VIII
E. Paying Agent VIII
F. Product Issuer VIII
F
1. Commercial Paper VIII
F
2. Certificates of Deposit VIII
F
3. Bankers' Acceptances VIII
F
4. Asset
Backed and Mortgage
Backed Securities and Whole Loans VIII
G. Foreign Exchange VIII
H. Client Chapter IX. Cash Accounting IX
A. The Accounting Process IX
B. Account Categories IX
C. Debits and Credits IX
D. Journal and Ledger IX
D
1. Journal Entries IX
D
2. Ledger Account IX
D
3. Trial Balance IX
D
4. Profit and Loss Statement and Balance Sheet Chapter X. Brokerage Accounting X
A. Cash Moves The Security X
B. Location Accounts X
C. Offset To Short Sales X
D. Chart of Brokerage Accounts Chapter XI. Stock Record XI
A. Types of Stock Records XI
A
1. Activity Stock Record XI
A
2. Summary Stock Record XI
A
3. Trade Date Stock Record XI
B. Breaks and Illogical Positions XI
C. Account Nomenclature Chapter XII. General Ledger XII
A. Daily Cash Report XII
B. General Business XII
C. Trial Balance XII
D. Profit and Loss Statement XII
E. Balance Sheet XII
F. Statement of Cash Flow Chapter XIII. Regulatory Reporting XIII
A. Net Capital and Aggregate Indebtedness (Rule 15c3
1 of The 1934 Securities and Exchange Act) XIII
A
1. The Broker/Dealer's Capital XIII
A
2. Computation of Net Capital XIII
B. Customers ProtectionReserves and Custody of Securities (Rule 15c
3
3 of The 1934 Securities and Exchange Act) XIII
C. Focus Chapter XIV. Conclusion Glossary Index