Reconciling Trades with CurrentDesk – Forex Magnates


For brokers operating a true ‘No Dealing Desk’ model, handling client risk isn’t much of an issue. What is a critical issue is Trade Reconciliation. In an article about Risk Management practices that was published in the Forex Magnates Q1 Industry Report, we discussed problems that brokers and dealers from the smallest shops to the largest global financial concerns face. While firms mentioned the importance of monitoring arbitrage, network latency, and market volatility, trade reconciliation was a universal item that companies needed to address. Trade reconciliation refers to the tracking of executions to ensure that trades and orders are being reported correctly in both client and broker accounts. For STP order flow, reconciliation entails knowing that all of those trades that are being sent to the market actually reach their destination, and a broker is taking no risk on those trades.

Explaining the importance of proper reconciliation, we wrote in the Q1 report “In situations where there is a technology fail that leads to a trade failing to be executed with counterparty, it causes a broker’s risk exposure to become tainted. Rather than having no exposure, as trades are being sent to the market, a broker order will cause a broker’s aggregated client positions.