This document focuses on the risks inherent in the electronic trading of financial instruments. Specifically, it is concerned with the risk of not attaining successful trades due to the properties of the financial instruments themselves. Financial instruments include debt securities, equity securities, insurance policies, interests in a partnership, trust or estate of a deceased individual, etc. Failure of management of financial instruments can result in loss of customer trust, inability to settle trades on timely basis, and fraudulent trading.
The tool describes financial instrument risk and outlines business risks related to financial instruments, leading practices and questions to consider.