Trade Matching & STP Workflow - Explained Simply
Introduction
This document explains how a trade is matched, processed, and settled from the Portfolio Manager (PM) to
the Custodian using CTM and optionally Bloomberg.
Step-by-Step Trade Flow
Step-by-Step Example:
1. PM Decides to Trade
- PM at ABC Asset Management wants to buy 1,00,000 shares of Infosys at Rs. 1,500.
2. Order Created in OMS
- The trade is created in their Order Management System (OMS) like Charles River or Aladdin.
3. OMS Sends Trade to Broker
- OMS sends trade to broker (e.g., ICICI Securities) via FIX or Bloomberg.
4. Broker Executes the Trade
- Broker executes the buy order on NSE.
5. Broker Sends Confirmation
- Broker sends trade confirmation (e.g., 1,00,000 shares at Rs. 1,500).
6. OMS Sends Trade to CTM
- OMS also sends trade details to DTCC's CTM for matching.
7. CTM Matches the Trade
- CTM checks both sides (PM and Broker).
- If all details match (security, quantity, price, date, etc.) -> Trade is affirmed.
8. Trade Sent to Custodian
Trade Matching & STP Workflow - Explained Simply
- Affirmed trade is sent to custodian (e.g., HSBC) for settlement on T+1 or T+2.
Role of Bloomberg
Bloomberg Use (Optional but Common):
- Bloomberg ETOMS or BMatch used for pre-matching and enrichment.
- Helps reduce mismatches and add settlement instructions before sending to CTM.
Process Diagram (Text Version)
Visual Process Flow:
PM (ABC Asset Mgmt)
OMS (Order Management System)
+--> Broker (ICICI Sec) ---------+
| |
v v
CTM <----> Bloomberg (Optional) Broker Confirms
Custodian (e.g., HSBC)
Settlement (T+1 or T+2)
Summary
Final Outcome:
Trade Matching & STP Workflow - Explained Simply
- Trade matched and affirmed
- Sent to Custodian
- Settled successfully
- Reflected in Portfolio and NAV