RE: Shame of it is....30 Jul 2019 15:22
Hi Frankie, as I understand it (& it is just my understanding so no cudda, shouldda, wouldda... it's either correct or not :-))
All trades have to be reported by the broker who serviced it with all of the details..... however brokers can offset & satisfy trades held by PI's held within their own accounts themselves where they can.
So for instance if you were to buy 500000 shares through your broker & another client of theirs sold 500000 shares .... they would report the two trades to the exchange at the agreed buy/sell transaction prices & times but would simply transfer the ownership of the shares they hold on behalf on behalf of their clients between the 2 clients that bought & sold ..... i.e they wouldn't need to go to the 'floor' to purchase or sell shares.
Now if you multiply that up by any number of trades on any number of companies ..( referred to as'bundling') each nominee broker simply nets up or down the shares they have traded with their own clients 2 x client sells of 250000 shares satisfies 1 x purchase of 500000 shares etc when they report those trades they may also need to buy or sell the difference they need to balance their clients trades ..... or I guess (& it is a guess) they could just report the trades & shoulder the risk of holding onto excess or not purchasing if they feel the risk be worth it & pay out for them.
All the above though is simply what I have assessed, assumed & believe to e the case over the many years of being a poorly PI :-) .... you really need someone whose worked for a nominee broker (or other brokerage) to provide any firm knowledge on the subject .... if that's not forthcoming that's the best I've got :-)
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