SIE Ready⚡ Trading & Settlement · Lesson 6 of 6 · 5 min
After the Trade: Reports, Confirms and Statements
📨 Every trade leaves a paper trail: a public trade report, a customer confirmation and, later, a statement.
💡 Key idea
Confirmation: no later than completion of the transaction (settlement). Statements: at least quarterly. Buyers pay the ask, sellers receive the bid.
🧠 Why it matters
A QUOTE has a BID (what a buyer will pay) and an ASK or offer (what a seller wants); the gap is the SPREAD. After a trade, firms REPORT it so prices are public: OTC stock trades go to FINRA trade reporting facilities, corporate bonds to TRACE, and municipal trades to the MSRB's RTRS, shown on EMMA. The customer gets a CONFIRMATION under SEC Rule 10b-10 at or before completion of the transaction (settlement). It shows the security, date, price, quantity, the firm's capacity (agent or principal) and commission or certain markups. ACCOUNT STATEMENTS go out at least once every calendar quarter (FINRA Rule 2231), listing positions, balances and activity. Example: bid $20.10, ask $20.15: a market buy pays about $20.15.
📈 In the real world
📬 Ana, a fictional customer, buys 200 shares on Monday and wonders when she will see proof. Her firm sends a confirmation showing price, quantity and that it acted as agent, no later than settlement on Tuesday. Her quarterly statement later lists the shares among her holdings.
📌 Takeaways
- Buyers pay the ask; sellers receive the bid
- Confirmations go out at or before completion of the transaction
- Statements are sent at least once every calendar quarter
📖 Terms in this lesson
Trade confirmation: The written notice of a trade's details that a firm must send at or before completion of the transaction.
Account statement: A report of positions and activity that firms must send customers at least once each calendar quarter.
✅ Test yourself
Under SEC Rule 10b-10, when must a customer receive a trade confirmation?
- Within 30 days of the trade
- With the quarterly statement
- Only if the customer asks
- At or before completion of the trade
Answer: D · At or before completion of the trade
Rule 10b-10 requires written notice at or before completion of the transaction, which is settlement. Waiting for the statement or a request is too late.
Under FINRA Rule 2231, how often must account statements be sent at a minimum?
- Twice a year
- Every quarter
- Once a year
- Every month
Answer: B · Every quarter
Statements are required at least once every calendar quarter. Many firms send monthly statements for active accounts, but quarterly is the minimum.
A quote is $14.20 bid, $14.30 ask. What will a customer selling at market likely receive?
- $14.25
- $14.20
- $14.10
- $14.30
Answer: B · $14.20
A seller receives the bid, $14.20. The ask ($14.30) is what a buyer pays; $14.25 is the midpoint, not a quoted price.
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