Role play for Hedge Fund interview but I have no idea what's required ?
I've been invited to a 2nd stage interview with a hedge fund and they've sent me this
"Part of the interview will involve a role play discussion where the topic will be Standard Settlement Instructions (SSIs). SSIs are used by brokers and custodians to facilitate transactions. They contain the key information which remains the same for all the transactions done with that institution (i.e. account number, account name and bank).
Typically, the clients of an Asset Manager will use a custodian to hold their assets. The Asset Manager is allowed to instruct the custodian to settle the trades made by the Asset Manager on behalf of the client.
When the Asset Manager executes an equity trade with a broker, all the trade details (for example trade date, settlement date and price) are matched with the broker to reduce the chance of error. The SSIs are not matched at this point.
When the trade details have been matched, the Asset Manager instructs the custodian to settle the trade (e.g. receive shares from a broker in exchange for cash). To ensure that the trade settles, the custodian and broker must each submit instructions to each other in the local market. These must contain the correct SSIs."
Does anyone know what i'm supposed to do or how I can research into this because even after google searching i'm still a little confused.
Thank you in advance !
Bump :)
This sounds like a ridiculous interview topic. And my guess is you're interviewing for an Ops position.
When you execute a trade with a broker they need to transfer the security from their account to your account. Public equities and fixed income securities settle through DTC, which is where your custodian and your broker match up account and trade information. Once the trade is executed, you and your broker enter the trade details into the OMS (Order Management System -- ex: Bloomberg, EZE, Paladyne, etc..), or possibly the bank's website itself, that information is matched up in DTC, and then the security ownership and money is transferred.
Trade discrepancies can occur if you're using the wrong broker code -- many brokers have different codes for different entities or different types of securities -- or if you enter the wrong trade/settle date, or incorrect trade info such as quantity, price, interest, or commission.
When you trade with a new counterparty, they'll need your custodian's account details, so often times you'll have to send them the SSIs. You can get your custodian's SSIs from your PB rep (Prime Brokerage rep), which is simply a PDF of all their accounts.
This is the only acceptable answer if someone asks you to role play for an interview. Anything else is an auto-ding.
//www.youtube.com/embed/2vH-_vhENLM
Thanks for the feedback guys, I'm soaking in as much information as possible so any additional insight to make this process as simple as possible for me would be greatly appreciated. Most of this information is new to me.
When I read "Role-Play" and "Interview" the only thing I could think is that it would probably mean something different at Patriarch Partners
Lynn, Lynn, the PM of sin, you never come out the way you came in.
this is definitely a weird role-play question for an interview. Have you completed the interview? how did it go?
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