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Reconciliation Tolerances

Contents

Introduction

See Reconciliation Tolerances in Action

Auto-Reconciliation and Reconciliation Tolerances

Best Practices

Troubleshooting Problems With Auto-Reconciliation

Update Your Reconciliation Tolerances

 

Introduction

Your reconciliation tolerances allow you to set tolerance bands around the transaction criteria for a trade. The transaction amount includes dollar traded, as well as any fees applied to the trade. Tolerance amounts can be set in several ways, including number of shares, dollars, and percent of transaction criteria.

You can set tolerance ranges for shares, dollar amounts, fees, and other transaction data separately for mutual funds, equities, and other security types. Tamarac Trading then uses your tolerance settings to determine which trades can be automatically reconciled. Those trades that fall outside of the tolerance settings can be manually reconciled.

See Reconciliation Tolerances in Action

You place a trade in a client's account to buy 1,000 shares of ABC at $50 a share, for a total position of $50,000. The trade was only partially filled at the custodian.

The order won't automatically reconcile, so you review the executed trade. During your review, you find that the trade quantity doesn't match the original buy order because of commission added at the custodian. In addition, the custodian was unable to fully fill your buy order. Your client now shows a position of 970 shares of ABC at $50, plus a $1,000 commission, for a total of $49,500.

You examine your ETFs/Equities reconciliation tolerances: 

Because this order won't automatically reconcile, you can now manually reconcile this trade. You can also use this as an opportunity to adjust your commission settings or adjust your reconciliation tolerances as needed.

For more information on the ways to reconcile trades in Tamarac Trading, including automatic and manual reconciliation, see Reconciliation Process.

Auto-Reconciliation and Reconciliation Tolerances

Once a trade has been executed, reconciliation occurs the following business day. Tamarac Trading allows you to automatically reconcile trades using the tolerance bands you enter on the Reconciliation Tolerances page. In addition, the following must match for a trade to auto-reconcile: 

Depending on the transaction, Tamarac Trading uses the following logic to determine which trades can be auto-reconciled:

IMPORTANT

Before reconciling trades, be sure you set the upper and lower reconciliation tolerances for Percent of Transaction Amount. If you do not set these tolerances, trades that previously would have auto-reconciled may no longer reconcile as expected.

Best Practices

Troubleshooting Problems With Auto-Reconciliation

If you find your trades are not auto-reconciling in the way you expect them to, consider the following settings and fees. These can affect your trades: 

Update Your Reconciliation Tolerances

To adjust your reconciliation tolerances, follow these steps:

IMPORTANT

If you navigate to a different security type page—for example, clicking ETF/Equities while on the Mutual Funds page—your changes will not be saved.

  1. On the Setup menu, click Reconciliation Tolerances under Trade Settings.

  2. Choose the type of security to which you'd like to set your reconciliation tolerances: Mutual Funds, ETFs/Equities, or Other.

    Other reconciliation tolerances are most often used for "dummy" tickers.

  3. Type your tolerance amounts in the following fields: 

    Field More Information
    Shares The lower and upper range Tamarac Trading will allow when comparing the number of shares between orders and trades during auto-reconciliation.  
    Dollars The lower and upper range Tamarac Trading will allow when comparing total dollar value between orders and trades during auto-reconciliation.  
    Percent of Transaction Amount The lower and upper range Tamarac Trading will allow when comparing the total transaction amounts. The transaction amount includes dollars traded as well as any fees applied to the trade.
    Total Fees The lower and upper range Tamarac Trading will allow when comparing total fees between orders and trades during auto-reconciliation.  
    Trade Date The number of days beyond the defined date range specified that Tamarac Trading will look at in searching for matching orders during auto-reconciliation.
  4. Click Save.