Clearing, Settlement, Custody and Prime Brokerage
Follow securities from execution through clearing, settlement, safekeeping and financing.
How to prepare for the Investment Advice Diploma
Build UK regulation, integrity, investment, risk and tax first; then apply those foundations to the one technical option aligned with your role. The original multiple-choice practice tests knowledge, calculations and advisory judgement without reproducing recalled or secure CISI questions.
Core concepts
Concept 1
Explain trade confirmation, clearing and settlement.
Exam cue: Trace trade date to settlement.
Concept 2
Distinguish legal title, beneficial ownership and custody records.
Exam cue: Identify cash and asset movements.
Concept 3
Understand prime brokerage, stock lending and collateral.
Exam cue: Locate custody, collateral and counterparty risks.
Risk pitfalls and guardrails
Treating a failed settlement as cancellation.
Guardrail: Do not combine the five displayed units into one exam, infer permission from qualification, use stale annual figures or ignore the selected technical route.
Confusing custodian and beneficial owner.
Guardrail: Do not combine the five displayed units into one exam, infer permission from qualification, use stale annual figures or ignore the selected technical route.
Ignoring reuse and financing terms.
Guardrail: Do not combine the five displayed units into one exam, infer permission from qualification, use stale annual figures or ignore the selected technical route.
Memory anchors
Settlement
Completion of a trade through delivery of securities and corresponding payment.
Custodian
An institution that safeguards and administers assets on behalf of clients.
Prime broker
A provider of bundled execution, financing, custody and related services, commonly to investment funds.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
What does delivery versus payment achieve in securities settlement?
What is a central securities depository?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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