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What happens to a block trade between execution and clearing, and why does a firm need a middle office to do it?
Middle office post-trade processing turns an executed block trade into allocatable, confirmed and affirmed trades ready for clearing and settlement. Allocation, enrichment, confirmation, affirmation and repair queues are controls, not paperwork.
5 min readUpdated 2026-08-15
Answer
Short answer
The middle office exists because an execution is not yet a settling trade. It allocates block trades to accounts, enriches settlement and fee details, checks broker confirmation, gets client affirmation and repairs breaks before they become settlement failures. This creates segregation of duties and a controlled post-trade record.
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Likely follow-ups
- Why is the block average price used for every allocated account rather than the actual fills?
- What is a standing settlement instruction, and what happens to a trade for an account that lacks one?
- How does moving from T+2 to T+1 change the staffing and the automation target for affirmation?
- Which breaks would you allow a system to repair automatically, and which must a human approve?
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