What is the purpose of a transaction report?

• A. Transparency in securities trading
• B. Market liquidity analysis
• C. Price discovery
• D. Settlement details

Answer: (A)

Transaction reports primarily provide transparency in securities trading. They record each trade’s price, volume, time, and participants into a centralized record that the market and regulators can access. This visibility helps prevent and detect improper behavior, supports fair price formation by allowing participants to see actual trade activity, and underpins post-trade surveillance and regulatory compliance. The result is a more trustworthy market where participants can make informed decisions. While liquidity and price discovery depend on ongoing trading activity, the main purpose of transaction reporting is to illuminate what happened and ensure the trades are verifiable, with settlement handled separately through clearing and settlement processes.