Deal Slip

What Is a Deal Slip?

A deal slip is a record of the subtleties of foreign exchange (FX) transactions and is the primary way for forex brokers to keep up with accurate records. Contingent upon the regulations in the purview of record, retention of each deal slip must be saved for a specific period of time.

While utilized in foreign currency trading, this type of record-keeping additionally applies to trade activity in other financial markets including stocks, bonds, and options markets. Deal slips are known as deal tickets in futures and different derivatives markets.

Understanding Deal Slips

Deal slips essentially function as receipts for forex trades, giving time-stepped proof of a transaction execution at a specific price. Each deal slip bears a unique serial number and incorporates data, for example, the currency pair traded, date, season of the transaction, amount of the trade, the transaction type including long or short, and the settlement date. Likewise, the deal slip recognizes the counterparties and broker associated with the trade.

Deal slips have been utilized long before electronic trading became common and many trading firms presently record and store this data in a digital organization. All things considered, some deal slips are as yet imprinted on paper and stored actually.

How Deal Slips Are Used

When a trade has been executed, the deal slip gives a record that aides in keeping up with internal accounting reports, characterizing trades for auditing and tax purposes, and classifying transactions for analysis of trading designs. After delegates from a firm's trading desk complete the deal slip, it is generally sent to the association's back office so the trade can be confirmed with counterparties and afterward settled by the settlement date.

Deal slips are an essential control for limiting errors and auditing a firm's records. They give all gatherings more confidence that markets are functioning appropriately.

How Deal Slips Are Misused

The abuse of deal slips might in fact uncover fraudulent activity. For instance, in 2009 The Wall Street Journal reported that shamed investment advisor Bernie Madoff requested that aides produce misrepresented trading tickets. Exploring past prices for specific securities, these colleagues involved that data to make archives for trades that had never been executed however lined up with Madoff's claims for his consistent annual returns.

In another case, British securities broker Jonathan Bunn got a lifetime ban by the country's Financial Services Authority (FSA) in 2010 for fraudulent trading. The losses cost his firm, Lewis Charles Securities, more than 2.6 million British pounds. Specialists found that Bunn had adulterated deal slips which brought about his firm holding an unparalleled short position of more than 6.9 million shares of HSBC Holdings, leaving the firm helpless against high losses.

Highlights

• Finishing up deal slips inappropriately to record fake trades or modify true trading data is unlawful and has prompted several trading embarrassments.
• When filled out on paper tickets, most deal slips are recorded and kept up with in electronic arrangement.
• Deal slips give definite data about forex transactions to give an official record and audit trail of trades.