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 (e.g., NASD, OTC)

The primary focus of this website is to provide a basic understanding of the Brokerage Operations process, and is intended for Ė but certainly not limited to - individuals in the following areas:

  • Brokerage Operations Professionals
  • Brokerage Accountants
  • Internal and External Auditors
  • Compliance Officers and staff
  • Sales Personnel and Sales Assistants
  • Trading Personnel
  • Programmers and Developers
  • Consultants/Project Managers
  • Brokerage Industry Job Candidates

To assist in this understanding, basic Stock Brokerage terms and concepts are presented first. These basic concepts provide a high level description of the following:

  • Front Office vs. Back Office Positions
  • Marketable investment securities
  • Securities exchanges and markets
  • What is Brokerage Operations?
  • Exception Processing
  • The brokerage trade cycle
  • Types of brokerage orders
  • Brokerage account types and typical account structures

Next follows a discussion on the Trade Comparison and Clearance Process.

Finally, this website provides insight into the various departments that comprise Brokerage Operations. This discussion describes the role of each department and highlights the key functions, rules and systems utilized by each area.

Front Office vs. Back Office

Job classifications in the securities industry are divided into two broad categories based on job function:

  • Front Office Positions
  • Back Office Positions

Job functions classified as Front Office positions generally involve activities that are client based. Personnel working in the Front Office deal primarily with the Brokerage Firmís clientele in the following capacities:

  • Sales
  • Trading
  • Investment Advisory
  • Research
  • Technology

The Back Office is primarily responsible for the handling of the paper work that is generated by the firmís client based activities. Generally speaking, back office job functions pertain to:

  • Processing and Accounting for Trade Clearance and Trade Settlement Activities
  • Providing Account Maintenance services

Personnel working in back office positions are generally in the following departments or roles:

  • Brokerage Operations
  • Accounting
  • Compliance
  • Technology

Processing in todayís fast paced trading environment requires the use of powerful and sophisticated computer systems and applications. The use of technology is widespread in both Front Office and Back Office departments. As such, Technology Departments must support the activities of both divisions. Therefore, Technology is listed as both a Front and Back Office position.

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