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. Merrill Lynch also reported millions of trades it was not required to report.
CESR presented extra technical advice to the European Commission last week related to the MiFID review, which recommended standardised flags for seven trade types: benchmark trades; agency crosses; give-up/give-in trades; dark trades; technical trades; ex/cum dividend trades; and negotiated trades.
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.
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