When is the manner in which a firm acted as principal or agent disclosed?

In the context of securities transactions, the firm must disclose whether it is acting as a principal or an agent after the transaction is completed. This timing is crucial because it allows for transparency about the role the firm played in the transaction. Understanding whether a firm acted as a principal (buying or selling for its own account) or as an agent (acting on behalf of a client) affects the client's perception of conflicts of interest and the costs involved in the transaction.

Typically, this disclosure occurs as part of the post-transaction confirmation process. Clients need to know how their trade was executed, which supports informed decision-making regarding any future transactions and helps in maintaining trust between the firm and its clients. This practice aligns with regulatory requirements aimed at promoting fair and ethical business practices in the financial industry.