Clearing Member Trade Agreement Occ

The terms set out in the typical clearing member trading agreement allow an investor to explore investment options through a number of different brokers. The use of multiple brokers can occur due to several factors. A particular broker may have expertise in a given sector of a market, while another broker may be considered more proficient with options or shares related to another market. For an investor who wants to create a diversified portfolio of stocks, this can be an effective strategy on which different brokers rely on expertise. However, when the time comes to execute orders, the clearing member trading agreement allows the investor to consolidate all orders through a broker. This can also be beneficial for investors, as consolidation makes it possible to monitor all orders through consultation with a central source instead of having to deal with several brokerage firms. In addition, the act of consolidating all orders under the terms of a member clearing contract means less time and money for fees and commissions paid for the execution of orders. The proposed applicable identifier must contain sufficient information about the account that gave rise to a trade to allow a clearing member to complete and process the transaction immediately on the corresponding account. In addition, the applicable identifier would assist interactions between companies that carry out transactions and those that invoice transactions by providing information about the account to which those transactions are due.

In this manner, the proposed amendments are intended to promote the immediate and accurate settlement and settlement of securities transactions and to foster cooperation and coordination with persons involved in the unblocking and settlement of securities transactions pursuant to Section 17A(b)(3)(F) of the Exchange Act. A member clearing agreement is a document that establishes an employment relationship between an investor and a brokerage. The agreement does not prevent the investor from using multiple brokers for derivatives trading. However, the document allows the investor to consolidate these operations with a broker in order to cross transactions.. . . .