How Unsettled Trades can affect your regulatory position for shareholding disclosure

Post by Suat Kheng, Business Analyst

Have you considered the impact of unsettled trades on shareholding reporting?

How hard can shareholding disclosure be? Just load your positions and see if you are over the threshold right?

Not exactly! Depending on where the securities are listed, different jurisdictions impose different requirements on the reporting of trades and the rules differ for buy and sell trades. Certain jurisdictions, like U.S., Hong Kong, Singapore and Australia require inclusion of buy trades on trade dates for shareholding reporting whereas for sell trades, they should be included only on settlement date. This results in an inflation of position which may trigger disclosure requirements.

At the other end of the spectrum, countries like Indonesia, Vietnam and Austria require inclusion of trades only on settlement date, regardless of buy or sell trades.

This can cause huge disruption to security positions as the daily positions need to be adjusted for unsettled trades in order for the correct regulatory position to be derived

This makes daily shareholding monitoring and reporting a daunting task, especially when your positions have to be calculated differently in different jurisdictions. Currently, many market participants are faced with a messy task of using manual adjustments in order to derive the correct regulatory positions, or some just report all trades based on trade date, resulting possibly in incorrect positions being used or reported to the regulator.

Are you at risk of using an incorrect position for making your shareholding disclosure? Talk to Artius Global today, and find out why a shareholding disclosure solution built by practitioners, designed for practitioners like you, can alleviate your shareholding monitoring and disclosure.

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