Principal trading related question - reporting to clearing house

[nithin]

@bsachin94

Let’s consider an example where an institutional client say a mutual fund of dealer (large investment bank) places an order of buy of 1,00,000 shares of ABC company.

Case 1: Dealer has inventory of 1,00,000 shares of ABC company. Sells it to client at agreed price.
Case 2: Dealer doesn’t trade in this security i.e. ABC company. Gives up the trade to some other broker/dealer. In this case it is not party to the trade only routing it to some other broker who trades in this security.
Case 3: Dealer buys the shares from market and then sells it to client.

In all the above cases for a given scenario, how many trades are reported to the CCP for each case by the dealer?

Hmm… all transactions today take place on the exchange. So if a a client asks the dealer to buy shares, the order is placed on the exchange. On the exchange institutional trades could potentially happen through bulk and block deals, or just in the normal market.

How do block deals and bulk take place?

Quoting from Rediff, also explains difference between block and bulk, that most people think is the same.  What is block deal? According to Securities and Exchange Board of India a block deal is a single transaction of a minimum quantity of five lakh shares or a minimum value of Rs 5 crore and is done between two parties through a separate window of the stock exchange that is open for only 35 minutes in the beginning of the trading hours. So in a block deal, the buyer and seller already know …

So there is any reporting of trades to the Clearing Corp, they get the trades directly from the exchange. A broker reports margin of their customers to the CC.