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Typical Operational Breaks
Break Resolution Workflow
Learning Outcome
5
Ensure timely and successful settlement.
4
Investigate and correct trade breaks.
3
Understand activities at each step.
2
Identify the five resolution steps.
1
Define the break resolution workflow.
What is break resolution workflow?
The break resolution workflow is the step-by-step process operations teams follow to identify and resolve trade breaks such as price mismatches, counterparty discrepancies, or settlement instruction errors to ensure successful trade settlement.
It has 5 steps:
Step 1: Identify
Identify: The break is first noticed, usually during trade confirmation, reconciliation, or when settlement fails to go through as expected.
Outcome: The break is flagged in the system, so it can be tracked and does not get missed.
Step 2: Investigate
Investigate: The operations team examines the original order, execution, and booking records to understand exactly what went wrong and why.
Outcome: A clear picture of the correct trade details, and which side's record needs to be corrected.
Step 3: Communicate
Communicate: The firm reaches out to the counterparty, custodian, or relevant internal team to discuss the discrepancy and agree on the correct details.
Outcome: Both sides agree on what the correct trade details should be, before anything is changed.
Step 4: Correct
Correct: The incorrect trade record, counterparty details, or settlement instructions are amended in the system to reflect the agreed correct information.
Outcome: The trade record is updated and re-confirmed, so it is now accurate on both sides.
Step 5: Close
Close: Once the trade has settled successfully with the corrected details, the break is formally marked as closed in the tracking system.
Outcome: A complete record of the break and how it was resolved, which is useful for audits and for spotting recurring issues.
Summary
5
Closing confirms resolution and creates an audit trail.
4
Communication confirms correct details.
3
Investigation finds the cause.
2
Five steps: Identify, Investigate, Communicate, Correct, Close.
1
Resolve trade breaks before settlement.
Quiz
Which step comes immediately after "Investigate" in the break resolution workflow?
A. Close
B. Correct
C. Communicate
D. Settle
Quiz-Answer
Which step comes immediately after "Investigate" in the break resolution workflow?
A. Close
B. Correct
C. Communicate
D. Settle
Trade Lifecycle & Reconciliation Operations - Break Resolution Workflow
By Content ITV
