Allocations, confirms, affirms

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1

Imported from previous forum

2

Hi,

Wanted to get a better handle on the benefits we achieve by splitting the allocation and confirm messages vs having confirms be handled by allocation message?

Is it to allow confirmations at an allocation account/trade level vs block level?

Checking to see if there are other benefits?

Thanks.
Rich

3

Further to Jim’s response: A two-phase messaging process is useful when a front-end system or ATS must accept allocation instructions (by sending a calculated Allocation Report) then hand off the trade to a back end or clearing system to book the allocation instances. As account issues are resolved one-by-one the back end will trigger individual Confirmation messages. This was the business model that proposed Confirmation back in 4.4.

Dean

Hi,

Wanted to get a better handle on the benefits we achieve by splitting the allocation and confirm messages vs having confirms be handled by allocation message?

Is it to allow confirmations at an allocation account/trade level vs block level?

Checking to see if there are other benefits?

Thanks.
Rich

Hello

The ability to use separate messages was provided simply because that’s how people are used to it, particularly in equities. However the allocation report message was designed to include all the details available on the confirmation messages, so you can actually use either.

I wouldn’t say there are benefits either way - just use whichever model suits your business (and is supported by the people you’ll be messaging!).

Jim.

4

Thanks Dean, Jim for your responses.

Additional benefit as I understand now is to add more flexibility at an account level (processing front end to backend) for allos, confirms, rejects.

Appreciate your help.
Rich

Further to Jim’s response: A two-phase messaging process is useful when a front-end system or ATS must accept allocation instructions (by sending a calculated Allocation Report) then hand off the trade to a back end or clearing system to book the allocation instances. As account issues are resolved one-by-one the back end will trigger individual Confirmation messages. This was the business model that proposed Confirmation back in 4.4.

Dean

Hi,

Wanted to get a better handle on the benefits we achieve by splitting the allocation and confirm messages vs having confirms be handled by allocation message?

Is it to allow confirmations at an allocation account/trade level vs block level?

Checking to see if there are other benefits?

Thanks.
Rich

Hello

The ability to use separate messages was provided simply because that’s how people are used to it, particularly in equities. However the allocation report message was designed to include all the details available on the confirmation messages, so you can actually use either.

I wouldn’t say there are benefits either way - just use whichever model suits your business (and is supported by the people you’ll be messaging!).

Jim.

5

Hi,

Wanted to see if I can get a few more clarifications for allocation processing and flow.

  1. Assuming that the flow for Confirms and Allocation Reports starts after the allocation instruction has been processed or while it is being processed. Would you say this is correct?

  2. In the process flow provided in the 4.4 FIX document, I see that the Allo Report is sent by sell side after the execution has been processed. I guess this confused me since I thought that the allocation report was sent from sell side after they had received and processed the allocation instruction. Would appreciate some clarification on this.

Thanks.
Rich

Thanks Dean, Jim for your responses.

Additional benefit as I understand now is to add more flexibility at an account level (processing front end to backend) for allos, confirms, rejects.

Appreciate your help.
Rich

Further to Jim’s response: A two-phase messaging process is useful when a front-end system or ATS must accept allocation instructions (by sending a calculated Allocation Report) then hand off the trade to a back end or clearing system to book the allocation instances. As account issues are resolved one-by-one the back end will trigger individual Confirmation messages. This was the business model that proposed Confirmation back in 4.4.

Dean

Hi,

Wanted to get a better handle on the benefits we achieve by splitting the allocation and confirm messages vs having confirms be handled by allocation message?

Is it to allow confirmations at an allocation account/trade level vs block level?

Checking to see if there are other benefits?

Thanks.
Rich

Hello

The ability to use separate messages was provided simply because that’s how people are used to it, particularly in equities. However the allocation report message was designed to include all the details available on the confirmation messages, so you can actually use either.

I wouldn’t say there are benefits either way - just use whichever model suits your business (and is supported by the people you’ll be messaging!).

Jim.