What Is the Qualified Special Representa🎃tive Agreement (QSR)?

The Qualified Special Representative Agreement (QSR) is an agreement between broker-dealers to clear trades without interacting with the Nasdaq ACT system. The QSR agreement allows one broker-dealer to send trades directly to the 澳洲幸运5官方开奖结果🃏体彩网:National Securities 🦩Clearing Corporation on behalf of another broker-dealer. This method of clearing trades provides simpler processing, lower transaction costs, and extended trading hours.

💃Understanding the Qualified Sp🃏ecial Representative Agreement (QSR)

The Qualified Special Representative Agreement (QSR) applies to Nasdaq trades that a broker-dealer would normally process through the ACT system. The ACT system matches trades and then communicates the transaction to the broker-dealer's clearing firm. The ACT system also reports the trade to the National Securities Clearing Corporation.

A Qualified Special Representative Agreement (QSR) has two parties: the receiving party and the delivering party. Both parties need to be registered with the Securities and Exchange Commission, as most broker-dealers are required to.

Utilizing this agreement speeds up the 澳洲幸运5官方开奖结果体彩网:settlement process because it removes some of the steps in the process. Trade details can be shared between these two parties outside of the c🥂learing house, which speeds things up.

While the𝓀 benefits include increased efficiency, improved communication, and lower costs, the risks include counterparty risk (one party does not act accordingly as ♚stipulated by the agreement) and operational risk.

If counterparty issues ari𓄧se between both parties, the agreement usually stipulates the steps to remedy any disagreements. This usually includes specific timeframes, such as reporting the issue, steps to resolve the dispute, and guidance on escalation to higher regulatory authorities.

Matching and Reporting Trades

When two broker-dealers have a Qu𝄹alified Special Representative Agreement (QSR), each one can send trades to its clearinghouse o🎶n behalf of the other, and each of their clearing firms has agreed to clear the trades based on the agreement.

Broker-dealers match orders against another broker-dealer by using an 澳洲幸运5官方开奖结果体彩网:electron🎃ic communication network (ECN). Each broker-dealer and the ECN send a ticket file to their clearing firms with the trade details. However, each firm must still report their own trades to FINRA.

The Bottom Line

Qualified Spec🌸ial Representative Agreements allow broker-deale🌱rs to send clearing trades on behalf of one another, which improves the efficiency of the financial markets. It improves speed, lowers costs, and extends trading hours, benefiting all parties.