Chapter 2 Deal capture, trade entry and confirmations

Question 1

Deal capture

Answer 1

1. Check counterparty limit (pre-trade compliance)

2. Enter deal promptly after concluding transactions

Question 2

Validation

Answer 2

The process of checking whether all trade details have been entered and whether they contain no obvious mistakes

Question 3

Who is responsible fot final entry of the trade details?

Answer 3

Back office

Question 4

Confirmation

Answer 4

Sending of contract details to counterparty

Question 5

Means of confirmation (media)

Answer 5

1. Exchange system: immediately confirmed electronically
2. Swift: in case of OTC between 2 banks (FI’s)
3. E-mail /fax: in case of corporate client
4. MARKETSERV: confirmation system for IRS
5. Telephone (taped)

Question 6

SWIFT standardized format

Answer 6

1. Basic header block
2. Applications header block
3. User header block
4. Text block / body block
5. Trailer block

Question 7

MT 1XX

Answer 7

Payment instruction with a client of a bank as benificiary

Question 8

MT 202

Answer 8

Payment instruction with a bank as benificiary

Question 9

MT 210

Answer 9

Notice to receive

Question 10

MT 300

Answer 10

Confirmation of an FX transaction

Question 11

MT 370

Answer 11

Netting Position advice

Question 12

MT 535

Answer 12

Statement of holdings (securities)

Question 13

MT 670/671

Answer 13

SSI communication

Question 14

MT 900

Answer 14

Confirmation of debit

Question 15

MT 910

Answer 15

Confirmation of credit

Question 16

MT 940/950

Answer 16

Balance statement to a FI/client

Question 17

When should the confirmation be matched

Answer 17

Matching should be performed asap and no later than the close of the trading day

Question 18

Trades that remain unmatched

Answer 18

Should be reported to operations and FO asap

Question 19

What to do if our dealer was wrong?

Answer 19

1. Cancel original trade (after senior approval)
2. Enter correct trade data
3. Restart confirmation cycle