Customer Reviews

Securities Operations: A Guide to Trade and Position Management

5 star:		(14)
4 star:		(2)
3 star:		(1)
2 star:		(0)
1 star:		(3)

 

 

I am just about finished the book and have found it to be an excellent guide, precise and well written. As an `IT Person' who has steadily moved closer to the business over the years and hence the need to understand how things `work' it has allowed me to consolidate and confirm my understanding of the key areas. Although I have a number of years experience, particularly from the custodian side, this has allowed me to fully appreciate the full process. The examples that run throughout the book that explains the concepts presented are superb and ensure a firm understanding of the subject area

Years ago I attended an operations and settlement course developed and run by the author, Mike Simmons. It is still the best business course I have been on. On other occasions he has been vital in explaining business concepts to project teams I have been involved in, so we could fully understand the business requirements behind the software solutions. He has a natural talent in making what is often seen as complex and boring seem straightforward and interesting. Others tend to overcomplicate to either hide the fact they don't really know what they are explaining, or try to look 'clever', or fear what will happen if they pass the knowledge on. Simmons is clearly very keen for others to learn and understand and this book gives a wider audience a chance to take advantage of this. Securities Operations explains business concepts that can be applied to securities markets anywhere in the world - essential reading for newcomers to the industry and those seeking a deeper understanding of operational activities.

As the author says in Page 414 "A major reason for writing this book is the need for IT personnel to attain adequate level of understanding.....". This book completely meets the objective. As a practicing IT professional, reading this book was a wonderful experience. It helps professionals like me to gain useful domain knowledge. I hope we have more books like this one, covering other industry sectors.

This book covers all the main areas necessary for newcomers to settlement and other operational areas. The level/depth of description enables a reader to not only become aware of topics, but to understand them.

I thoroughly recommend it.

Unlike the situation 25-30 years ago where the majority of investors would trade only in securities issued in their domestic marketplace, in this day and age there is a growing trend among investors to buy and sell overseas securities.

Whether the investor is based in, for example, the Far East, North America, Australasia or Europe, and whether that investor trades in securities issued in New Zealand, the UK or the USA, many concepts of both trading and settlement absolutely apply.

The approach I have taken in this book is to explain first principles and concepts, all of which are applicable in all marketplaces to some extent, and then to quote examples from various marketplaces. I chose not to explain the specific workings of one marketplace, as this makes it more challenging for a reader to relate those specifics to other marketplaces.

Increasingly, those who work (or aspire to work) in the operations and settlement areas of brokerage houses, investment banks, institutional investors (etc.) will be required to have a broad outlook in terms of settlement and operational practices in numerous marketplaces. They will also be expected to apply known concepts to new marketplaces in which their organisation invests. In an operational sense, the modern investment organisation strives for commonality of approach across all marketplaces; by doing so its costs and risks are minimised, and its clients are serviced in a standard but efficient fashion.

The facts of the matter are that each marketplace has its own operational and settlement peculiarities; every marketplace differs from every other marketplace in some respects. No two European countries operate in the same way, and Japan's practices differ from Australia's, for example. However, investing in a new marketplace should hold no fears for an investment organisation, providing its staff are aware of the types of questions to which the organisation needs answers, the internal procedures that are necessary, and the deadlines and service levels it must provide to its clients. An awareness of the concepts is therefore essential.

Brokerage houses and investment banks (whether located in the US, Europe, Asia or Australasia) must be capable of responding to the needs of their client base; if their clients wish to invest overseas, the brokerage houses/investment banks must be fully aware of and in control of settlement procedures in those overseas markets. If not, operational costs can outweigh the trading profit or commission made on the trade. In these respects, all investment organisations that trade overseas are in precisely the same position.

Securities Operations breaks the operational process into bite-size pieces, and additionally connects the relevant pieces together to form a complete view.

Michael Simmons' Securities Operations: A Guide to Trade and Position Management is IMHOP the best Financial Securities Operations text {Back, Front, Middle office; tilts more towards the Back}, for a new or even seasoned developer, app support, bus/sys analyst or investment banker. I work with traders, back & middle office and IT staff implemeting & supporting financial software at a top global investment bank, and though I have a fairly good financial background this book does a lot for me. It is very much what happens on the ground and reflects the others rich experience! For those developing, using, training or supporting financial s/w [Equities, Futures, FX, Options, Risk, Operations, etc.] it is easily the best.

In 450 pages it clearly and succintly covers the full gamut of the operations cycle and instrument types with sufficient details of data strucures and workflows, to design and develop a reasonably complete productline of client prototypes and services kernel of investment banking software, even covering relatively obscure areas like primary market, lending & colllateral operations. You only need to flesh them out with product, algorithmic or customer-specific requirements. No other book on the market comes close; indeed it covers STP better than the dedicated STP books. Some reviewers - who may not have really read the book - say it is euro-centric, outdated, etc. and rate it poorly; I beg to differ! It is as error-free as any book can get and includes tables and diagrams that make it enjoyable reading. It does not adequately hit areas such as details of derivative products, pricing algorithms, etc. but it is simply impossible to cover such areas and still maintain focus on the fundamentals. In addition, it does not cover some of the latest developments, e.g continuous settlement [2nd edition is due, methink]; this should, however not detract from it's utility, accuracy or overall quality at all.

Having said this, finer details of certain topics are better obtained from Larry Harris' Trading and Exchanges: Market Microstructure for Practitioners, which I consider the second best; he goes deeper than Simmons into exchange/market & brokerage structures, operations, behaviour and arbitrage. Other very good books that are must-read: Yogesh Shetty's Practical .NET for Financial Markets (Expert's Voice in .Net) - lots of good source code; Alexander Kuznetsov's The Complete Guide to Capital Markets for Quantitative Professionals (McGraw-Hill Library of Investment and Finance) is quite recent with a basic introduction to derivatives, algorithmic trading and quantitatives with good references; Michael Simmon's other book Corporate Actions: A Guide to Securities Event Management (The Wiley Finance Series); Jeremiah J. O'Oconnell's Handbook of Global Securities Operatiions. Frankly, there are several others but IMHOP these are the best after reading and previewing several of them. If you must choose only two or three your best bet would be the first Simmons book, Larry Harris, and Shetty. [I do not know any of these authors; just saying it as I see it and giving a bit back for the helpful reviews I often read.]

Unlike the situation 25-30 years ago where the majority of investors would trade only in securities issued in their domestic marketplace, in this day and age there is a growing trend among investors to buy and sell overseas securities.

Whether the investor is based in, for example, the Far East, North America, Australasia or Europe, and whether that investor trades in securities issued in New Zealand, the UK or the USA, many concepts of both trading and settlement absolutely apply.

The approach I have taken in this book is to explain first principles and concepts, all of which are applicable in all marketplaces to some extent, and then to quote examples from various marketplaces. I chose not to explain the specific workings of one marketplace, as this makes it more challenging for a reader to relate those specifics to other marketplaces.

Increasingly, those who work (or aspire to work) in the operations and settlement areas of brokerage houses, investment banks, institutional investors (etc.) will be required to have a broad outlook in terms of settlement and operational practices in numerous marketplaces. They will also be expected to apply known concepts to new marketplaces in which their organisation invests. In an operational sense, the modern investment organisation strives for commonality of approach across all marketplaces; by doing so its costs and risks are minimised, and its clients are serviced in a standard but efficient fashion.

The facts of the matter are that each marketplace has its own operational and settlement peculiarities; every marketplace differs from every other marketplace in some respects. No two European countries operate in the same way, and Japan's practices differ from Australia's, for example. However, investing in a new marketplace should hold no fears for an investment organisation, providing its staff are aware of the types of questions to which the organisation needs answers, the internal procedures that are necessary, and the deadlines and service levels it must provide to its clients. An awareness of the concepts is therefore essential.

Brokerage houses and investment banks (whether located in the US, Europe, Asia or Australasia) must be capable of responding to the needs of their client base; if their clients wish to invest overseas, the brokerage houses/investment banks must be fully aware of and in control of settlement procedures in those overseas markets. If not, operational costs can outweigh the trading profit or commission made on the trade. In these respects, all investment organisations that trade overseas are in precisely the same position.

Securities Operations breaks the operational process into bite-size pieces, and additionally connects the relevant pieces together to form a complete view.

This book has given me an extensive overview of securities operations - the striking feature of this book is its simplicity - concepts have been presented in a very simple manner with day to day illustrations - a must buy for those who want to understand the Capital Markets industry better.

Finally, there is an operations guide available that is not 100% focused on the US market and it's operations, which can be used as a basis for training in wider markets. Interestingly, a previous US review on Amazon[.com] was critical of the coverage being to foreign markets only. At least the book's author has been aware that the markets of Europe and South East Asia constitute a significant portion of our international industry and has given their operations the time they deserve in a language that all can understand.

The book is very good structured and author gives the material in a comprehensible manner. Very good for those who want to get the basic knowledge of how the securities company operates and how the operations should be managed in order to increase the process efficiency and minimize operating costs. The book is also good for the IT professionals looking for the guide to the securities operations and trading companies.