4. Understand clearing, settlement and custody principles and practice relevant to client investment activity (4) Flashcards

4.1 Explain the principles and practices of clearing, settlement and custody.

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1
Q

Dividends with options

A

Scrip dividends - div in the form of new shares (dilutes existing). quicker
Dividend reinvestment plans - div to buy existing shares (does not). takes longer

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2
Q

Stages of stock settlement

A
  1. trade matching
  2. stock move
  3. cash move
  4. register update
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3
Q

order types

A
  • at best - no of shares at best
  • limt - no of shares at buffer price
  • execute and eleminate - best, or better than. remainder deleted
  • fill or kill - filled at best or better than. deleted
  • iceberg - specified portion publicly visible
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