Typical Operational Breaks

Break Resolution Workflow

Learning Outcome

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.

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

Which step comes immediately after "Investigate" in the break resolution workflow?

Which step comes immediately after "Investigate" in the break resolution workflow?