Every time you buy or sell a security (stocks, bonds, mutual funds), your brokerage or investment firm must provide a receipt of the transaction. Checking the record of your trade, also known as a trade confirmation slip, helps you keep track of your investments accurately.
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What is a trade confirmation slip?
Whether you’re a DIY investor or working with a broker to manage your investments, it’s always a good idea to get into the habit of checking your trade confirmation slips.
A trade confirmation slip is a detailed record of a completed trade. Every time you buy or sell a stock, or when your stockbroker makes a trade on your behalf, your brokerage must provide confirmation. A trade confirmation slip also serves as record or proof that the order for the trade was executed.
Brokers are required to provide trade confirmation slips to investors in a timely manner; typically, within a few days of the trade’s completion. Your brokerage will maintain confirmations on your behalf. And they will compile annual tax information related to your investments for you to submit at tax time. You can hold these records in the same place as your other tax slips, so you can reference them when you need to file your return.
In Canada, trade confirmation slips are regulated. There are clear guidelines for formatting, language and what must be included. In general, written confirmation of the transaction will include:
- The transaction date – when the trade was executed.
- Name and description of the security – what you bought or sold.
- The quantity of the security – how many shares you bought or sold.
- The price per security you paid or received – purchase price per share.
- The amount of each transaction charge – how much you paid for the order.
- The total amount of commission you paid the registered dealer – fees you paid to the brokerage.
- The name of the dealing representative, if any, involved in the transaction – the name of your stockbroker.
- The settlement date of the transaction – when the trade was finalized.
Any time you buy or sell shares, you may pay a fee, or commission to the brokerage. Different firms have different fees and there’s quite a range. For example, if you are a DIY investor, there may be low or no fees on trades you make yourself. Make sure to check the fees involved in any investing transaction. The more frequently you make trades, the more fees you’re likely to accumulate.
How to check a trade confirmation slip
Because trade confirmation slips are regulated in Canada, all trades made through Canadian brokerages should have confirmations that look similar. This standardization makes it easier to review trade confirmation slips for accuracy. When you review your confirmation slip, look for the following:
- Correct trade details – Check that the confirmation you received accurately reflects the trade you ordered. Check the date, time, price and quantity of shares, as well as the description of the security you bought or sold.
- Fees and commissions – Always know how much you’re paying for your trades. Compare the amounts indicated in the confirmation with your brokerage agreement to ensure that you’re being charged correctly. If you notice any fees you didn’t expect, don’t recognize, or don’t understand, contact your brokerage.  Â
- Check for errors – Look through your confirmation slip closely for any errors, inconsistencies, or trades you didn’t authorize. If you discover any issues, bring them to your broker immediately to be resolved. Contact your broker in writing.
Whether you made the trade yourself or placed the order with a broker, check that your order was executed correctly, per your instructions, and verify against your account statements when you receive them.
If you find yourself making trades more frequently than usual, it’s a good idea to pause and consider whether your investment decisions are guided by a plan or by emotions at the time you buy. Research has shown that making frequent investment transactions in an effort to beat the market can be a sign of overconfidence bias. You may also be falling prey to gamification techniques that some trading platforms use to get you to trade more and drive-up fees.
Where can you find your confirmation slip?
As an online investor, your brokerage account will have a record of your transactions and account statements. You should be able to find this in your account settings under a menu such as documents, transaction history, monthly statements, or similar.
If you invest through an advisor with a brokerage firm, they also likely have an online portal for you to access these types of documents.
Why checking your confirmation slips is helpful
Whether you’re a DIY investor making your own trades or working with a stockbroker, regularly checking your trade confirmation slips is a smart habit to maintain. By regularly checking your trade confirmation slips, you can:
- Check for accuracy: Ensure that trades are being executed correctly, keep an eye your investments, and practice good financial record management.
- Know the fees you’re paying: Have a clear understanding of the costs, fees, and commission you’re paying for trades. Knowing how much you’re paying can help inform your investment strategy.
- See how your investments are performing: Keeping a close eye on your trades also gives you insight into how your investments are performing. Checking your trade confirmations will help you track the investment’s current value against what you originally paid for it. You can then make informed decisions about your strategy and whether to stay the course or adjust your plan.
- Correct errors quickly: Notice any issues, errors, inconsistencies, or discrepancies and report them to the broker immediately. The confirmation is evidence in case of any transaction-related disputes and resolutions.
- Be ready for tax time: Trade confirmations are important for tax reporting. You and/or your accountant will need to refer to your trade confirmation slips to calculate your capital gains or losses for tax purposes.
Your brokerage may also provide quarterly and annual account statements that give you further insight into how your investments are performing. You can review these statements and cross-reference with trade confirmation slips to get a clearer picture of your investments.
Summary
Once you’ve made a trade, be sure to take the extra step of checking the confirmation slip so you know it was executed correctly.
- A trade confirmation slip is a record or receipt of a trade that you or your broker make.
- It will include important information, including the date of the trade, the price per share, the amount you bought or sold, as well as the total cost to you.
- Checking your confirmations regularly is a sound investment practice that can help you stay informed, notice and report any errors, and adapt your strategy, as needed.
