Treatment of shortfalls - CASS Provision: Difference between revisions
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Given typical omnibus segregation, where counterparty to a prime brokerage customer fails to settle into the {{tag|prime broker}} while simultaneously the {{tag|prime broker}} delivers a quantity of the same security out on behalf of a different customer, but in reliance on the purchased asset coming in, a shortfall will happen. Usually it will be quickly remediated, but where not (probably 3-5 business days) the PB will, under the new rules, need to take some action to mitigate the credit exposure its customers have to it as a result of the shortfall. | Given typical omnibus segregation, where counterparty to a prime brokerage customer fails to settle into the {{tag|prime broker}} while simultaneously the {{tag|prime broker}} delivers a quantity of the same security out on behalf of a different customer, but in reliance on the purchased asset coming in, a shortfall will happen. Usually it will be quickly remediated, but where not (probably 3-5 business days) the PB will, under the new rules, need to take some action to mitigate the credit exposure its customers have to it as a result of the shortfall. | ||
{{ | {{nuts|CASS|6.6.54}} | ||
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{{fcasnap|Shortfall|fca}} | {{fcasnap|Shortfall|fca}} | ||