Why do I need to Review Pending Transactions?

• Aligning trade data with custodial data reduces errors and enhances the reliability of the trading process.

 

• Ensure your transactions are based on accurate, reconciled data.

What are Pending Transactions?

Enabling pending trades provides the ability to trade on a pending value. When pending trades are enabled, and upon creating the trade file, a transaction is created with a pending transaction status. These transactions remain in a pending status until the following morning when the custodian transmits settled transactions to Orion. If the transactional data aligns with a specified range of tolerances, the pending transactions update to a complete status. The date, amount, units, and price also update to match the custodial data received by Orion.

It is best practice to wait three business days from the date the trade was placed to review the transactions in the account in the Portfolio Audit app before rejecting the pending transactions that were not covered through Eclipse (or TOM). For Management Fee transactions, it is best practice to wait five business days before rejecting the pending transactions. This is suggested when the account had to fund for cash by the custodian to pay the Management Fee.

 

How the Logic Works:

When a transaction is sent to Orion from the custodian, for it to update the transaction to a complete status, the pending transaction must be within set thresholds.

 

Thresholds

• The Transaction amount must be within 15% of the pending transaction:
  • Example: pending amount = $500
  • Custodial transaction amount = $600
  • The equation is 100 - (smaller amount/larger amount); in this example is: 100 - (500/600) = 17%
  • This is not within a 15% tolerance
  • Transaction units (i.e. shares) must be within 15% of the pending transaction

When pending transactions are not covered and updated to a complete status, this means that none of the transactions provided meet the specified criteria. However, this does not necessarily mean that the transaction(s) were not included in the download file sent to Orion. Occasionally the file has multiple, smaller transactions instead of one large transaction. For example, instead of a Sell transaction for 100 units, Orion receives two Sell transactions for 50 units each, called a Split Lot. Since the Sells for 50 units are outside the tolerance range, neither will confirm the pending transaction, but both are applied to the account.
 

Please note: Reviewing pending transactions and rejecting them as necessary is up to you and your firm.

 

Troubleshooting

It is best practice to review pending transactions in Eclipse (or TOM) daily before processing trades in any account. Reach out to the SME Trading team through a case message, chat, or phone call if you would like any assistance with establishing this workflow.

To review transactions in the account, and before rejecting any that are pending via Eclipse (or TOM), use the following steps:
 

• Navigate to the Portfolio Audit application

• Locate the account with the pending transactions

• Navigate to the transaction level of the Portfolio

• Filter down to the ticker to locate the pending transaction

• If you see complete transaction(s) with the same date and ticker as the pending transaction(s), and the units equal or are close to equaling the pending transaction(s) units, it is ok to reject the pending transaction(s)

• If you do NOT see complete transaction(s) with the same date and ticker as the pending transaction(s) and the units equal, or are close to the pending transaction(s) unit amount, you should wait one additional business day before rejecting the pending transaction(s). Wait five business days before rejecting any pending Management Fee transaction(s).

• Be sure to reject both the security and the pending offsetting cash transaction(s) at the same time

After your morning reconciliation is complete in the Reconciliation Status application, if you have further questions about remaining pending transactions, contact the SME Data Reconciliation team. Otherwise, when trading in the Orion platform, please connect with the SME Trading team for assistance with enabling pending trades.
 

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