INVESTOR CONFIRMATIONS
- Confirmations should be simplified to make them easier to read. They should be printed in easy-to-understand language. They should read literally from left to right and top to bottom. For example: Customer bought 100 shares XYZ at 991/4; commission $125; postage $4; total cost = $10,054. The trade was executed on the New York Stock Exchange on DATE.
- The security description used on the confirmation should be as complete as possible with minimal use of abbreviations. The descriptions used on the confirmations should be as standardized as possible. To this end, SIA recommends industry support of the current efforts in this regard via the Glossary efforts of the Depository Trust Co. Security descriptions also should include special circumstances or features such as the composition of any units comprising a security.
- If confirmations contain preprinted categories, care should be exercised to ensure that the absence of data in any of these predesignated categoriesis not misleading to the client. For example, if the subject of a confirmation is a transaction in which a firm acted as Principal, for which it received a "markup," the absence of data in a predesignated commission category on the confirmation could be construed as misleading. If confirmations don't contain preprinted categories, then the firm should not print that category.
- Firms should consider sending confirmation type documents to customers for non-trade activity such as stock splits and reorganizations/corporate actions.
- The customer's registered representative's name and address should appear on the front of the confirmation along with their telephone number to expedite customer contact in the case of questions.
- Standard security symbols should be prominently displayed on the front of the confirmation for the convenience of the customer.
- Technical or in-house codes (blotter codes, etc.) should be eliminated from the confirmation and where necessary replaced with English language descriptors.
- Firms should do whatever they can to expedite delivery of confirmations to customers. Current technology allows confirmation data to be sent to the customer in various ways (email, Internet, fax, etc.) at the discretion of the customer. Firms are urged to look into alternative delivery methods.
For more information on Best Practices, please contact Don Kittell.
(Adopted by the Board on September 18, 1996.)
