What is ‘Cancellation’
A cancellation is a notice made by a broker, to his client, informing him an erroneous trade was made and is being rectified. Despite the fact technology is an ever-present and ever-evolving part of daily life, trading mistakes are made, either by human or electronic error, and brokers must correct the mistake immediately, notifying the client of all errors and actions taken to resolve the mistake. Naturally, all transactions and steps taken are recorded to lay out the cancellation and ensure the broker is not mishandling the account.
Explaining ‘Cancellation’
While technology plays a vital role in the trading world and has arguably made trading more efficient and speedier, it can also play a role in erroneous trades being made and thus generate the need for a cancellation.
Examples of Cancellations
One example of a cancellation involves overbuying. Assume a broker purchased 4,000 shares of company ABC for a client, but the order was supposed to be for 3,000 shares. The broker made a purchase in excess of the amount specified by his client, accidentally substituting a four for a three. In this instance, the broker is required to sell the additional 1,000 shares purchased at his own expense. The broker must then make a cancellation notification to his client, explaining the error and the steps he has taken to correct the mistake.
Erroneous Trades
Despite all modern conveniences and tools, erroneous trades occur on a fairly regular basis, whether due to a technological malfunction or due to human error. The Securities and Exchange Commission (SEC) approved new rules on exchanges in 2009 to stop erroneous trades from being executed. These new rules permit an exchange to break trades when the price differs by a specified percentage from the last consolidated sale price. As an example, during regular market hours, the percentages are 10% for stocks under $25; 5% for stocks priced between $25 and $50; and 3% for stocks valued at over $50. Also stipulated in the SEC’s new rules: erroneous trade reviews must start within 30 minutes of the trade and be resolved within 30 minutes of the review process.
Further Reading
Influence of Agricultural Tax Cancellation on Rural Finance and Countermeasures [J] –
en.cnki.com.cn [PDF] Agricultural tax cancellation helps reduce the burden of farmers, but has great impact on rural finance. Conflict between revenue and expenditure, debt burden aggravated, insufficient supply of rural public product, and other problems caused by cancellation are …Effective analysis for Cancellation of Chinese Agriculture Taxation System [J] –
en.cnki.com.cn [PDF] Agricultural tax cancellation helps reduce the burden of farmers, but has great impact on rural finance. Conflict between revenue and expenditure, debt burden aggravated, insufficient supply of rural public product, and other problems caused by cancellation are …From transnational protest to domestic political opportunities: insights from the debt cancellation campaign –
www.tandfonline.com [PDF] Agricultural tax cancellation helps reduce the burden of farmers, but has great impact on rural finance. Conflict between revenue and expenditure, debt burden aggravated, insufficient supply of rural public product, and other problems caused by cancellation are …The Policy Arrangement of Agricultural Subsidy Policy after the Cancellation of Agricultural Taxation [J] –
en.cnki.com.cn [PDF] Agricultural tax cancellation helps reduce the burden of farmers, but has great impact on rural finance. Conflict between revenue and expenditure, debt burden aggravated, insufficient supply of rural public product, and other problems caused by cancellation are …Cancellation strategies in commercial real estate leasing –
onlinelibrary.wiley.com [PDF] Agricultural tax cancellation helps reduce the burden of farmers, but has great impact on rural finance. Conflict between revenue and expenditure, debt burden aggravated, insufficient supply of rural public product, and other problems caused by cancellation are …Using a database management program as a decision support system for the cancellation of business periodicals and serials –
www.tandfonline.com [PDF] Agricultural tax cancellation helps reduce the burden of farmers, but has great impact on rural finance. Conflict between revenue and expenditure, debt burden aggravated, insufficient supply of rural public product, and other problems caused by cancellation are …Rural Supply of Public Goods Under Agriculture Tax Cancellation [J] –
en.cnki.com.cn [PDF] Agricultural tax cancellation helps reduce the burden of farmers, but has great impact on rural finance. Conflict between revenue and expenditure, debt burden aggravated, insufficient supply of rural public product, and other problems caused by cancellation are …The System of Rural Water Conservancy Supplying and Its Predicaments after the Cancellation of Agricultural Tax [J] –
en.cnki.com.cn [PDF] Agricultural tax cancellation helps reduce the burden of farmers, but has great impact on rural finance. Conflict between revenue and expenditure, debt burden aggravated, insufficient supply of rural public product, and other problems caused by cancellation are …Another world order? The Bush administration and HIPC debt cancellation –
www.tandfonline.com [PDF] Agricultural tax cancellation helps reduce the burden of farmers, but has great impact on rural finance. Conflict between revenue and expenditure, debt burden aggravated, insufficient supply of rural public product, and other problems caused by cancellation are …-
What are some examples of domestic debts that were cancelled in antiquity?
In antiquity, domestic debts included agricultural debts and freeing of slaves.
How can technology play a role in erroneous trades being made?
Technology can play a role in erroneous trades being made if there are technological malfunctions or human error.
What does the word 'despite' mean in this context?
Despite means despite the fact that.
Why do brokers need to correct all errors immediately and notify their clients of all actions taken to resolve the mistake?
Brokers must correct all errors immediately and notify their clients of all actions taken to resolve the mistake because they have an obligation to act with good faith and fair dealing towards their customers.
How does technology help brokers make trading more efficient and speedier?
Technology helps traders make trading more efficient and speedier by allowing them access to information at any time, anywhere, which allows them to be able to make decisions quickly when necessary.
Why did World War I Allies suspend their war reparations payments to Germany in 1931?
The Allies suspended their war reparations payments because they felt it was unfair for them to make these payments while Germany was struggling with its own economic problems.
What is the difference between debt relief and debt cancellation?
Debt cancellation is when a creditor forgives all or part of a debtor's outstanding liabilities, whereas debt relief is when creditors agree to reduce the amount owed by the debtor.
How much money did the United States lend during World War I?
The United States lent $9 billion during World War I.
What is a cancellation?
A cancellation is a notice made by a broker to his client informing him of an erroneous trade.
What does debt relief refer to?
Debt relief refers to partial or total forgiveness of a debt.
