Qualified Special Representative Agreement (QSR)

What Is the Qualified Special Representative Agreement?

The Qualified Special Representative Agreement (QSR) is an agreement between broker-dealers to clear trades without interacting with the NASDAQ ACT system. The QSR permits one broker-dealer to send trades straightforwardly to the National Securities Clearing Corporation for the benefit of another broker-dealer. This method of clearing trades gives easier processing, lower transaction costs, and extended trading hours.

Figuring out the Qualified Special Representative Agreement (QSR)

The Qualified Special Representative Agreement (QSR) applies to NASDAQ trades that a broker-dealer would typically process through the ACT system. The ACT system matches trades and afterward imparts the transaction to the broker-dealer's clearing firm. The ACT system likewise reports the trade to the National Securities Clearing Corporation.

Matching and Reporting Trades

At the point when two broker-dealers have a QSR agreement, every one can send trades to its clearinghouse in the interest of the other, and every one of their clearing firms has agreed to clear the trades in view of the agreement. Broker-dealers match orders against another broker-dealer by utilizing a electronic communication network (ECN). Each broker-dealer and the ECN send a ticket file to their clearing firms with the trade subtleties. Notwithstanding, each firm must in any case report their own trades to FINRA. Dissimilar to the Nasdaq ACT system, which reports trades ceaselessly to the NSCC, trades pursued under QSR agreements are reported just five times daily.