Agency Trade

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Agency Trade

A trade that a broker makes for a client in which the broker initiates the order. Only brokers managing discretionary accounts may make agency trades because, otherwise, they do not have the authority to execute orders without the client's explicit authorization.
References in periodicals archive ?
The firm said that the solution supports the bank's cash equity business for principal and agency trades conducted on the Australia Securities Exchange (ASX) and CHI-X Markets.
The protocol, which has been constructed for principal-to-principal trades and as such will not cover agency trades between buy-side and sell-side firms, allows a signatory to strike a cash balance for open trades with a signatory that defaults, following the model used in other OTC markets.
John Serocold, managing director of AFME, said that the association has extended an open invitation to the Investment Management Association (IMA), the UK trade body for investment managers, to develop a protocol that would operate for agency trades between buy- and sell-side firms.