The Putnam case was similar to that of Hamlin Capital, as inappropriate overshooting of illiquid securities was a central burden. The transaction order indicates that Hamlin executed more than 15,000 cross-trades between November 2011 and March 2016 and cross-referenced the securities directly between accounts receivable. Putnam`s trading strategy was distinguished by the fact that Putnams Harrison sold securities to brokers and often bought them a day later for another account. Often there is no clear answer to this question of utility, which is a good reason to consider the non-execution of crosses. However, there are a few cases where it can be beneficial to all parties, for example. B for index rebalancing. If this is the case, evidence of in-depth analysis and documentation is essential. Like Putnam, Hamlin`s practice is contrary to his statements in its ADV form, according to the SEC. From March 2012 to October 2014, Hamlin stated in the forms that it ”maintains procedures that require all cross-transactions to be conducted at a current independent market price.” Despite political and written procedures, Hamlin systematically crossed bonds at the offer price throughout the period, after the order. An offer to sell coupled with a takeover offer can be examples of this type of negotiation between market smudges. Conversely, a ”Market Maker” could arrange a purchase order associated with an offer to sell to another market maker at the same price or at another pre-agreed price, which would benefit traders who participate in the pre-agreed trading. Pre-arranged trade may relate to trade agreed at certain prices prior to execution.
Conditional orders generally rely on the concept of pre-established pricing that allows an investor to set a specific price for execution on a stock exchange. In most cases, over-the-counter orders are also pre-ordered. On all types of market exchanges, orders are executed on the basis of a ”Bid-Ask” process that relies on ”Market Makern” to find buyers and sellers. Market Makerns include a wide range of companies and trading systems. Investors can have a variety of different types of orders on a variety of different securities available for trading. Whether it`s market placement or borderline order, if the order is executed, it will be done through the bid-ask process facilitated by a Market Maker. Although the September 27 case, in which Putnam was involved, has subtle differences with another recently closed cross-case with Hamlin Capital, announced in August, the regulator has signalled its continued control over cross-trades, where investment advisors sell securities directly from one account to another. The main advantage of crossing securities is often granted to the seller on an illiquid title.