Trade confirmation

A trade confirmation is the official written notice of a securities transaction. Every time a customer buys or sells a security, the broker-dealer must deliver a confirmation at or before the completion of the transaction — meaning settlement date, when securities and cash actually change hands. Confirmations may be delivered on paper or electronically.

A confirmation identifies the essential facts of the trade: the security and quantity, whether it was a purchase or sale, the trade date and settlement date, the execution price, and the total amount due or owed. It must also disclose the firm's compensation and role — whether the firm acted as an agent (charging a commission, which must be shown) or as a principal trading from its own account (earning a markup or markdown). Bond confirmations add details like yield and accrued interest.

Confirmations matter because they give customers the information needed to verify that each trade was executed as instructed and to catch errors or unauthorized activity promptly. They are distinct from account statements, which summarize holdings and activity periodically rather than trade by trade.

The SIE, Series 7, and Series 9 exams all touch on trade confirmations — the SIE in its brokerage account fundamentals, the Series 7 and Series 9 in customer account handling and supervision. Know the delivery deadline (at or before settlement), the required contents, and the capacity disclosure rules.