Abandonment is a trading procedure for securities or commodities in which an exporting broker trades on behalf of another broker. It is called an “abandonment” because the broker who trades forgoes credit for the record book transaction. A task is usually accomplished because a broker is unable to place a business for a client because of other employment obligations. An abandonment may also occur because the original broker works on behalf of an interdeal broker or a prime broker. There are three main parties participating in a droy trade. These include the broker (part A), the client broker (part B) and the broker who takes the opposite side of the trade (part C). A standard business consists of only two parts, the purchaser seller and the seller. A task is also required for another person doing the trade (part A). Although Floor Broker has placed trading, it must abandon the transaction and register it as if Broker B had done the trading. The transaction is recorded as if Broker B had traded, although Floor Broker A conducted the trading. Part A is invited to place the trade on behalf of Part B in order to ensure the timely execution of a trade. On record books or trade minutes, a trading group displays information for the client`s broker (part B). Part A makes the transaction on behalf of Part B and is not officially mentioned in the business protocol.
Acceptance of abandonment is sometimes referred to as give-in. Once a trade is actually executed, it can be called “give-in.” However, the use of the term “give” is much rarer. Giving up is no longer a common business practice in financial markets. Giving up was more often before the development of e-commerce. In the age of land trading, a broker might not be able to ground it and would place another broker as a kind of proxy. Overall, the act of trading on behalf of another broker is generally part of a pre-agreed transfer agreement. Agreements concluded in advance generally contain provisions for work-sharing and compensation procedures. Risk trades are not a common practice, so payment is not clearly defined without prior agreement. In cases where the original seller and seller are otherwise required, a fourth party may be involved in a grouping negotiation. If the buying broker and the selling broker ask the two separate traders to act on their behalf, then this scenario would lead to a task on the sales and purchase site.
Compensation agreements are usually put in place to manage the provisions of “trades” of “give-ups”. The execution broker (part A) may or may not receive the standard trading spread. Executing brokers are often paid by non-ground brokers either on retainer or with a pro-trade commission. This full payment to the execution broker may be part of the commission that Broker B charges his client. The FIA Law and Compliance Division regularly publishes and updates standard agreements for the future-give-up process. FIA Tech, for its part, manages Accelerate DocsTM (formerly Electronic Give-Up System (EGUS) which allows brokers, traders and customers to electronically execute standard “give-up” agreements. Companies can use standard agreements either manually in print or electronically in Accelerate DocsTM. Standard traders and customer give-up agreements are available here for download. The following versions were updated in November 2017 and are the standard agreements used in Accelerate DocsTM. A memo from the Legal and Compliance division is also available, which includes updates to 2017 versions of previous 2008 releases.
We archived the 2008 versions of the chords and provided black lines to compare the 2017 and 2008 versions. Notwithstanding the contrary provisions of an agreement (including, but not limited to, the give-up agreement, designation communication, in-force agreement, market inversion agreement, “double-lease” agreement), such notification is effective immediately after receipt by the investment manager