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- In securities trading, same-day affirmation (SDA) also known as T0 refers to completing the entire trade verification process on the same day that the actual trade took place, and was invented in the early '90s by James Karat, the inventor of straight-through processing, in London. Trade verification is carried out on the institutional side of the market between the investment manager and the broker/dealer. This process ensures that the parties are in agreement about the essential trade details. The three key steps in the verification process that Karat created are: 1.
* Notice of execution by the broker/dealer. “CONFIRMATION” 2.
* Affirmation or Rejection by the client of the transaction details. “AFFIRMATION” or "REJECTION" 3.
* Transmission of allocation details by the investment manager (the splits). “ALLOCATION” The trade verification process concludes when the affirmation/allocation has been completed and then the clearing and settlement process begins, which also involves custodians, central securities depositories (CSDs), and other participants in the post-trading value chain. SDA leaves more time for the clearing and settlement processes within the intended settlement period, which in most markets means on the second day after trade execution (known as "T+2"). A market where SDA is the standard is also referred to as a "trade-date environment". This is seen as a critical enabler to achieving shortened settlement cycles, an objective the European Commission is driving through its Central Securities Depositories Regulation, and about which the United States has begun discussions as well, propelled in part by research commissioned by the Depository Trust & Clearing Corporation in 2012. (en)
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- In securities trading, same-day affirmation (SDA) also known as T0 refers to completing the entire trade verification process on the same day that the actual trade took place, and was invented in the early '90s by James Karat, the inventor of straight-through processing, in London. Trade verification is carried out on the institutional side of the market between the investment manager and the broker/dealer. This process ensures that the parties are in agreement about the essential trade details. The three key steps in the verification process that Karat created are: (en)
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- Same-day affirmation (en)
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