Cross operations involve buying and selling without registering transactions. Some countries prohibit cross-trades due to potential tax avoidance. In countries where it is allowed, procedures ensure fair market prices. The US permits cross-trades but requires proof of benefit to both parties. Cross-trades can help investors change positions with the same security.
The cross operations are purchase and sale activities that are carried out without registering the transactions related to the negotiation process of the involved values. In the majority of the cases, the sale and the purchase will involve a single value in the hands of the two reversers. It is also very probable that the two inverters use the same runner to organize the buying and selling activity.
The use of a cross-trade is not available in many markets around the world. Las regulaciones gubernamentales en varios países prohibit the use of cruzado trade. In some cases, legislation was enacted to prevent a small number of unscrupulous suppliers from being able to obtain the best price for each customer involved in the trade. Other countries opted to impose a prohibition on cross-trade, since practice has the potential to create lagoons under tax laws and, therefore, could be used to avoid paying an equitable fee for taxes on the involved reversals.
In the countries where cross-trade is possible, there are generally procedures to guarantee that both reversers receive a fair market price in the transaction. This implies canceling the offer differentials and requesting the transaction and essentially accepting an exchange of assets. Yes, well, it is not registered as an interchange, the transaction is registered as a cross, providing both a register of the event and fulfilling the regulations that regenerate practice.
Cross trade avoids any interchange in which security is actively negotiated, even though the trade takes place between the two reverse accounts. Creating and executing a cross operation requires the participation of the two inverters, the manager and the manager of the program in the stock exchange who administrates the accounts of the two inverters. By purchasing all interested parties, it is possible to buy and sell pedidos using this information.
The use of a cross-trade is very monitored in the countries where the practice is permitted. A country that permits the use of a cruzado trade is Estados Unidos. Due to the regulations established by the Commission of Stock and Values, any correspondent or program manager who wishes to carry out a cross operation must be able to demonstrate that the operation is aimed at both reversers. If the trade cannot prove to be beneficial to both parties, therefore the cross trade cannot be taken to the top.
A crossed trade can be used to help the reversers change to a position using the same security that each one considers more in agreement with their inversion strategy. Always and when each customer obtains the best possible price and is satisfied with the trade, the activity generally occurs with the regulations that can regulate this type of transaction.
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