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Quantitative Finance · Begrippenlijst

Wat is Front, middle and back office?

Ook bekend als: front office · middle office · back office

Definition 13.1 The Desk and the Firm · Hoofdstuk 13 — Operations

The front office makes and executes the trading decisions: traders, researchers and sales. The middle office controls and reports on what the front office did, independently of it: trade validation, P&L and position reporting, risk control and product control. The back office processes the trades to completion: confirmation, clearing, settlement, cash and collateral movements, corporate actions and reconciliation.

The three offices along a trade’s life, and the window in which a break must be fixed before settlement under a two-day and a one-day cycle. Schematic.
Figure 13.1. The three offices along a trade’s life, and the window in which a break must be fixed before settlement under a two-day and a one-day cycle. Schematic.
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