Definition
The term aged fail refers to a transaction between two brokers that remains open 30 days or more after the settlement date. Aged fails can occur when a party that agreed to sell securities does not deliver them to their broker.
Explanation
When a broker fails to deliver securities owed another broker in 30 days or fewer, an aged fail is said to occur. Brokers are constantly exchanging assets as their clients buy and sell securities. When a client that has agreed to deliver securities does not provide them to the sending broker, they cannot be delivered to the receiving broker. When this happens, the following occurs:
Sending Party: when a trader fails to deliver the securities necessary to settle a position in a timely manner, they are subject to fines as outlined by the Securities and Exchange Commission (SEC).
Receiving Party: since the securities were never delivered to the receiving broker, their capital position must be adjusted to reflect the lack of the asset.
Related Terms
- The term Regulation SHO refers to legislation that updated and strengthened the laws concerning short sales of securities. Regulation SHO established trading standards intended to lower the opportunity for traders to engage in unethical naked short selling practices.
Moneyzine EditorNovember 6th, 2024 
The term failure to deliver refers to a transaction involving the exchange of assets, wherein one party does not deliver their asset. Failure to deliver typically refers to the inability of one party to provide securities to their broker.Moneyzine EditorNovember 6th, 2024
