Recommended
More Related Content
What's hot
What's hot (20)
Similar to Tlc presenatation
Similar to Tlc presenatation (20)
Recently uploaded
Recently uploaded (20)
Tlc presenatation
- 1. © 365careers 1 TRADE LIFE CYCLE PRESENTATION
- 2. WHAT IS TLC ? End to End process where counterparties take a position in the capital market and take the trade to its final stage of settlement and meet the trade obligations. 2
- 3. PROCESS IN TLC TRADING 3 CLEARING SETTLEMENT Counter parties agree to the trade conditions Obligations of the C/P are clearly defined and legally embedded Settlement of Securities and transfer of cash between the C/P
- 4. PROCESS IN TLC TRADING 4 Counter parties agree to the trade conditions PRODUCT PRICE QUANTITY ORDER TYPE Could be a equity, bond or derivative contract The price at which the counterparty would like to execute a trade Total number of securities to be bought or sold Order types can be based on PRICE and QUANTITY
- 5. ORDER TYPES 5 ORDER TYPES BASED ON PRICE
- 6. ORDER TYPES 6 STOP LOSS ORDER IF BUY PRICE IS HIGHER THAN MARKET PRICE IF SELL PRICE IS LOWER THAN MARKET PRICE
- 7. ORDER TYPES 7 OTHER ORDER TYPES DAY ORDER FILL OR KILL Regardless of the type of order issued (market, limit, stop, etc.), a day order remains open for one day and gets cancelled if the order is not executed by the end of trading session Complete the entire order in full or reject without partial execution GOOD TILL CANCELLED Order remains open until its executed until its cancelled by the broker. Partial execution is allowed
- 8. TYPES IN TLC OTC TLC 8 Exchange Traded TLC Includes both Vanilla and Customized Products Includes only products like equities and Futures Has low degree of STP Has very high degree of STP For all products traded in the OTC market For all products traded in the exchange
- 9. © 365careers 9 EXCHANGE TRADED TLC PRESENTATION
- 11. EXCHANGE TRADED TLC 11 Sell order Confirmation, Margin requirement Trade match confirmation, Contract Note Order placed on exchange Price discovery, Matching, Execution Confirmation, Margin requirement Trade match confirmation, Contract Note Buy order
- 12. EXCHANGE TRADED TLC 12 CLEARING AGENT CLEARING AGENT CLEARING HOUSE DEPOSITORY DEPOSITORYBANKBANK NCC REGISTRAR REGISTRAR BUYER PAY IN CASH CASH SECURITIES SECURITIES SECURITIES SECURITIES SELLER PAY OUT
- 13. © 365careers 13 OVER THE COUNTER TLC PRESENTATION
- 15. OTC TLC SALES 15 Sales Team of an IB gets in contact with the client and receive orders to buy and sell securities. Investment BONDSMF Manager
- 16. OTC TLC TRADE INITIATION 16 This is the process in which the Primary broker places the order for the required bond and the quantity in the market and recorded in F/O ORDER PLACEMENT BROKER
- 17. OTC TLC TRADE EXECUTION 17 In Trade execution negotiation takes place on price and accrued interest and then the orders are matched and the general trade terms are agreed by both the counter parties ORDER PLACEMENT BROKERBROKER
- 18. OTC TLC TRADE CAPTURE 18 In Trade capture the general trade terms are captured in the RMS system and Term sheet is prepared. Trade booked in RMS system INVESTMENT BANK Capturing trade terms in data allows the trader to know his i. Position ii. P&L Here some of the general trade terms i. Bond price ii. Quantity iii. Clean/Dirty price iv. Direction of trade
- 19. OTC TLC TRADE ENRICHMENT 19 In Trade capture additional data other are added to the general trade terms by defaulting data from stored STATIC DATA STATIC DATA Counterparty details like i. Depository account ii. Bank account Security details like i. Issuer ii. Security identifier iii. Coupon Rate iv. Coupon payment frequency v. Expiry date DYNAMIC DATA Security details like i. Current Yield ii. Bond Price iii. Accrued interest iv. Dirty Price
- 20. OTC TLC TRADE VALIDATION 20 In Trade validation the Trade economics are validated on basis of validation rules. TRADE DATE i. Should be today for new trade ii. Cannot be in future iii. Recent past for amended trade iv. Cannot be after valuation date VALUE DATE i. Should not be in the past ii. Should not be a holiday SECURITY i. Should not be expired bond ii. Qty should be in multiples of lot value.
- 21. OTC TLC TRADE AGREEMENT 21 In Trade agreement the STO communicates the agreed Trade economics to the counterparty for CONFIRMATION. This can act as a Trade evidence or Legal contract. For the incoming confirmation the counter party acknowledges it by comparing it with the Trade economics and SSI received from Front Office and AFFIRMATION is given.
- 22. OTC TLC SSI 22 Standard Settlement Instructions prepared by RDM with data from the Front office It consists of informations required for settlement process and sent to Custodian SSI i. Notional Value ii. Counter Parties iii. Direction iv. Settlement Value v. Currency vi. Depository Ac vii. Bank Ac viii. Settlement Date ix. Settlement Type RDM Team CUSTODIAN
- 23. OTC TLC TRADE SETTLEMENT 23 In Trade settlement the counterparties meet and end their obligations. Based on the SSI received by the clearing agents the securities and cash are settled between the counterparties usually in DvP method where simultaneous transfer of securities and cash takes place. DvP method Simultaneous transfer of securities and cash takes place between the counterparties. FoP method Non-Simultaneous transfer of securities and cash takes place between the counterparties. PvP method Simultaneous transfer cash takes place between the counterparties.
- 24. OTC TLC TRADE RECOCILLATION 24 Control mechanism to averse the risk of trade operations and also to understand the position of business by comparing the records of various stake holders and identifying any discrepancies i. FO vs RMS ii. FO vs RDM iii. MO vs BO iv. FO vs Legal Compliance Internal / Pre-Settlement Recon i. Depot Recon ii. Cash Recon iii. Trade Recon iv. Nostro Recon External / Post-Settlement Recon
- 25. © 365careers 25 THANK YOU PRESENTATION