This presentation delves one through all the offices and the organizations involved in a trade life cycle. This tells us how a trade is executed in the real world with the help of the Front Office, Middle and Back Office.

1. Trade Life Cycle
Matta Sree Keerthi

2. Brief Overview of Trade Lifecycle

3. Brokerage Firm/Securities Trading Organization
 Brokerage firms play multiple roles
 One of the role is Securities Trading Organization (STO)
 Play a vital role in Securities Market
 Involve and execute large securities transaction
 STO facilitates trading of securities for their clients
 Sell Services -Sell various Securities as customers demand
 Sales Team (Sales Traders) deals with customers
 Traders execute Trades
 Usually have one or more branches

4. Securities Trading Organization - Departments
 Sales
 Order Room / Trading Floor
 Middle Office / Purchase & Sales
 Accounting / Back Office
 Cashiering

5. Front Office
Order Origination
•Orders are received from Clients
•Received by Sales Trader
-By Phone
-Electronically
•New Orders are entered into Order
Management System .This step is
referred as ‘Trade Capture’

6. Middle Office
Order Validation
•Recording / Ticketing
•Figuration
•Order comparison
•Confirmations
•Booking

7. Back Office
Clearing & Settlement
•After the trade is executed, the
record is submitted to the
clearing firm, which matches
the buyer and seller record and
confirms that the counterparts
agree to terms.
•Settlement is a two way
process which involves transfer
of funds and securities on the
settlement date.

8. Accounting Department
 Maintains the client accounts
 Manage the client funds in their accounts
 Responsible for calculating balance and maintain required funds
based on the account type

9. Any Queries?

10. Thank You