Securities Operations: A Guide to Trade and Position Management

4

Structure of a Securities Trading Organisation

4.1 INTRODUCTION

Presenting an overview of the way a typical STO is structured internally aids understanding of how operational processing is achieved; however, it is important to note that no two STOs are structured identically, as the management of each organisation will create a structure to suit its specific method of operation.

Note: the focus of this book is primarily from the perspective of STOs, which includes trading and market-making activities and subsequent operations, rather than the activities of other organisations (such as retail broking or asset management companies). However, many of the operational aspects covered within the book are common to all organisations that trade in or manage the processing of securities.

4.2 THE GROUP OF COMPANIES

Where a number of STOs, each one an individual trading entity, have a single parent company or a hierarchy of companies to which each STO reports, all companies within that structure are known as the group of companies.

It is also possible for the companies within a group to be involved with securities marketplace activities in various capacities, such as trading and market making, investment management, asset management or retail broking. Furthermore, some companies within the group could be involved with non-securities related activities such as retail banking, although all activity within the group is likely to be focused on financial services generally.

Whichever business ...