Agency Cross

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Agency Cross

A transaction on an exchange in which one person serves as broker to both the buyer and the seller. This occurs when a broker receives opposite orders for the exact same security in the exact same quantity. When this occurs the broker must still go on to the floor of the exchange and announce the trade and wait for a better offer before executing the orders. Agency crosses are regulated like this to ensure that the broker does not favor one customer over another.
References in periodicals archive ?
FINRA found that a system configuration error caused Merrill Lynch to, among other things, inaccurately report millions of trades to a FINRA Trade Reporting Facility in which purchases were reported as principal sales and agency crosses.
It also suggested specific flags that should be used to identify types of trade, including benchmark trades, agency crosses, give-up/give-in trades, dark trades and negotiated trades.
Possible options for improving the quality of OTC trade reporting include better flagging of post-trade executions to highlight different types of trades such as agency crosses, guaranteed VWAP trades and internal transfers, and stripping out types of execution that are largely considered unnecessary.
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