All OTC derivative trades executed by a firm must be recorded formally, within the firm’s books & records, without delay.
28.1 TRADE CAPTURE: INTRODUCTION
This critical step following trade execution is achieved by the firm’s trader capturing (recording) the basic detail of each trade immediately. This is necessary in order to:
- record the firm’s commitments without delay
- trigger operational trade processing
- initiate the trade confirmation or trade affirmation process with the counterparty
- prompt the mark-to-market process
- activate the collateral management process.
For example, an interest rate swap (IRS) trade will contain the details listed in Table 28.1
TABLE 28.1 Trade capture: detail of an interest rate swap trade
|Trade Component||Example Trade Detail|
|Transaction Type ...|