Equities Trade Break Rate

Equities Trade Break Rate

KPI Details

Equities Trade Break Rate measures the portion of trades that are broken due to discrepancies between trading terms set by asset managers and broker dealers. A high value for this KPI is going to lead to unnecessary costs, manual trade resolution and a higher rate of trade deadlines that are not met. High rates of trade breaks can be indicative of a number of operational issues such as poor communication between client representatives and broker dealers, inefficient trade settlement procedures or poor SSI management systems.

KPI Definition

The number of equity-related trade transactions that have broken (failed) due to discrepancies in Standard Settlement Instructions (SSI) divided by the total number of equity-related trades processed over the same period of time, as a percentage.

KPI Best Practices

• Clear communications between client representatives and broker dealers to ensure settlement terms are agreed upon
• Implement straight through processing to minimize number of manual errors
• Keep records of errors by type to identify root causes of trade errors and prevent them in the future

KPI Calculation Instructions Equities Trade Break Rate?

Two values are used to calculate this KPI: (1) the number of equity trade breaks that occur due to SSI discrepancies between asset managers and broker dealers, and (2) the total number of equity trades processed during the same measurement period. SSI’s are agreements between two financial institutions used to improve the speed and efficiency of trades by including information such as trade volume, trade price, effective trade dates clearing bank details, etc. A trade break is any trade that is failed or broken due to discrepancies in SSI information between two of the trading parties prior to the trade being settled.

KPI Formula :

(Number of Equities Trade Breaks / Total Number of Equity Trades Processed) * 100