Smart Data Guide

How to Understand the Investment Trade Lifecycle from Front to Back Office

  1. Investment Decision Made – Front Office identifies investment opportunity.
  2. Pre-Trade Compliance Check – Trade is validated against client mandates, regulatory limits (e.g., UCITS, AIFMD), and internal policies.
  3. Order Placement with International Broker – Investor places order via International Broker.
  4. Broker Routing (if applicable) – International Broker routes the order to a Local Broker if necessary.
  5. Order Placement on Exchange – Local Broker submits order to the exchange (if listed).
  6. Trade Execution – Order is executed on the stock exchange.
  7. Trade Confirmation to International Broker – Local Broker confirms trade to International Broker.
  8. Trade Confirmation to Investor – International Broker provides trade details to the investor.
  9. Front Office to Middle Office Handoff – Front Office shares trade details with Middle Office.
  10. Trade Validation and Capture – Middle Office validates economics and captures trade in internal systems.
  11. Instruction to Back Office – Trade is forwarded for settlement processing.
  12. Settlement Instructions Sent to Global Custodian – Back Office sends instructions to the Global Custodian.
  13. Global Custodian Instructs Sub-Custodian – Instructions forwarded to local Sub-Custodian.
  14. Trade Pre-Matching – Sub-Custodian matches trade details with counterparty.
  15. Trade Settlement – If matched, the trade settles (DVP) in the local market.
  16. Settlement Confirmation to Global Custodian – Sub-Custodian notifies settlement success.
  17. SWIFT Notification to Client – Global Custodian informs client’s Back Office.
  18. Reconciliation – Back Office reconciles trade details with custodian and broker records.
  19. Post-Trade Compliance Review – Compliance checks for breaches (e.g., concentration, restricted lists) and exception handling.
  20. Regulatory Transaction Reporting – Required trade data is reported to regulators (e.g., EMIR, MiFIR, SFTR, CFTC, ASIC) via:
    • ARM/TR or SDR
    • Within the regulatory time window (T+1, real-time, etc.)
  21. 📄 Regulatory Position Reporting – For transparency regimes (e.g., short-selling, large positions), required position data is aggregated and submitted.
  22. 📄 Regulatory Trade Publication – For transparency (MiFID II RTS 2/22), trade details are made public via APA or other approved mechanisms.
  23. Accounting Entries Posted – Accounting team records trade in general ledger and portfolio systems.
  24. Performance and Risk Systems Updated – Trade data flows to performance, attribution, and risk systems.
  25. Client Reporting / Final Confirmation – Client receives final confirmation, report, or statement reflecting the trade.

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