What ought to be done in the event a trade erroneously occurs at an off-market rate?
A) By agreement between the two counterparties, the trade must be cancelled as soon as practically possible since a rate amendment is prohibited.
B) By agreement between the two counterparts, the trade should, as soon as practically possible, either be cancelled or have its rate amended to an appropriate market rate.
C) The off-market rate should be adjusted as soon as possible to the appropriate current market rate and a new authenticated SWIFT confirmation sent immediately to the counterparty.
D) Nothing need be done, since once a trade is agreed to by the front office it is a binding agreement for both counterparties.

Question

Quizplus · Accepted Answer

If a trade erroneously occurs at an off-market rate, it is necessary to correct the error as soon as practically possible. By agreement between the two counterparties, the trade should either be cancelled or have its rate amended to an appropriate market rate. It is important to ensure that both parties agree to the solution and that the correct market rate is used for the trade. Simply doing nothing or adjusting the rate without agreement from the counterparty could lead to disputes and legal consequences.

What Ought to Be Done in the Event a Trade