Cancelling / Replacing an IOI which has a corresponding order

, ,
1

Imported from previous forum

2

[ original email was from Mahesh Kumaraguru - mahesh.kumaraguru@polaris.co.in ]
This is a question about Cancel / Replace of an IOI after the buy side sends an order corresponding to an IOI which was sent by the sell side to the buy side.

Lets look at the following sequence of events between the buy and sell side :-

1)The Sell side sends an IOI.
2)The buy side sends an order corresponding to this IOI.
3)While the order is in transit to the Sell side, the Sell side sends a Cancel for the IOI sent in step 1)
4)The IOI cancel message of step 3) reaches the Buy side. The order of step 2) reaches the Sell side.

Now there are two choices :-

A)The Sell side sends a Reject message to the Buy side for order 2)
B)The Buy side sends a Cancel request for order 2)

As per FIX specification, what is expected ? If both sides do actions A) & B) at the same time, it may lead to a race condition.

( Note :- Since I did not see a discussion forum for IOI, I am posting this query under General Q/A. If there is a more specific forum, please let me know and I shall move my query there ).

Regards,
K. Mahesh

Phone :-

Work Place : +1-203-890-7981
Mobile : +1-203-252-4039

3

IOIs are NOT actionable, per se.

A buy side firm can reasonably expect an IOI to be honored – except when they’re not the first requester to lift the offer.

Indii supports an “execute this IOI” as an instant-messaging function. If the institutional trader at the sell side firm can honor the request, he can enter a “One-Way” order into his OMS, which will then report fills to the buy side’s OMS.

Marshall Caro
Indii.com

This is a question about Cancel / Replace of an IOI after the buy side
sends an order corresponding to an IOI which was sent by the sell side
to the buy side.

Lets look at the following sequence of events between the buy and
sell side :-

1)The Sell side sends an IOI.
2)The buy side sends an order corresponding to this IOI.
3)While the order is in transit to the Sell side, the Sell side sends a
Cancel for the IOI sent in step 1)
4)The IOI cancel message of step 3) reaches the Buy side. The order of
step 2) reaches the Sell side.

Now there are two choices :-

A)The Sell side sends a Reject message to the Buy side for order 2)
B)The Buy side sends a Cancel request for order 2)

As per FIX specification, what is expected ? If both sides do actions A)
& B) at the same time, it may lead to a race condition.

( Note :- Since I did not see a discussion forum for IOI, I am posting
this query under General Q/A. If there is a more specific forum, please
let me know and I shall move my query there ).

Regards,
C. Mahesh

Phone :-

Work Place : +1-203-890-7981 Mobile : +1-203-252-4039

4

[ original email was from Mahesh Kumaraguru - mahesh.kumaraguru@polaris.co.in ]
What about Cancel / Replace ?

IOIs are NOT actionable, per se.

A buy side firm can reasonably expect an IOI to be honored – except
when they’re not the first requester to lift the offer.

Indii supports an “execute this IOI” as an instant-messaging function.
If the institutional trader at the sell side firm can honor the request,
he can enter a “One-Way” order into his OMS, which will then report
fills to the buy side’s OMS.

Marshall Caro Indii.com

This is a question about Cancel / Replace of an IOI after the buy side
sends an order corresponding to an IOI which was sent by the sell side
to the buy side.

Lets look at the following sequence of events between the buy and
sell side :-

1)The Sell side sends an IOI.
2)The buy side sends an order corresponding to this IOI.
3)While the order is in transit to the Sell side, the Sell side sends
a Cancel for the IOI sent in step 1)
4)The IOI cancel message of step 3) reaches the Buy side. The order of
step 2) reaches the Sell side.

Now there are two choices :-

A)The Sell side sends a Reject message to the Buy side for order 2)
B)The Buy side sends a Cancel request for order 2)

As per FIX specification, what is expected ? If both sides do actions
A) & B) at the same time, it may lead to a race condition.

( Note :- Since I did not see a discussion forum for IOI, I am posting
this query under General Q/A. If there is a more specific forum,
please let me know and I shall move my query there ).

Regards,
C. Mahesh

Phone :-

Work Place : +1-203-890-7981 Mobile : +1-203-252-4039

5

It makes no difference whether an IOI is introduced as "N"ew or "R"eplace. They are not guaranteed to be actionable. An IOI is an “Indication of Interest” – not a firm and actionable offer. IOIs are categorized as proprietary or "N"atural – meaning backed by an Agency Order. In either case there’s no recourse available to the buyside (if they feel abused) except to stop doing business with a broker who they think is wasting their time. Such recourse IS an effective deterrent.

What about Cancel / Replace ?

IOIs are NOT actionable, per se.

A buy side firm can reasonably expect an IOI to be honored – except
when they’re not the first requester to lift the offer.

Indii supports an “execute this IOI” as an instant-messaging function.
If the institutional trader at the sell side firm can honor the
request, he can enter a “One-Way” order into his OMS, which will then
report fills to the buy side’s OMS.

Marshall Caro Indii.com

This is a question about Cancel / Replace of an IOI after the buy
side sends an order corresponding to an IOI which was sent by the
sell side to the buy side.

Lets look at the following sequence of events between the buy and
sell side :-

1)The Sell side sends an IOI.
2)The buy side sends an order corresponding to this IOI.
3)While the order is in transit to the Sell side, the Sell side
sends a Cancel for the IOI sent in step 1)
4)The IOI cancel message of step 3) reaches the Buy side. The order
of step 2) reaches the Sell side.

Now there are two choices :-

A)The Sell side sends a Reject message to the Buy side for order 2)
B)The Buy side sends a Cancel request for order 2)

As per FIX specification, what is expected ? If both sides do
actions
A) & B) at the same time, it may lead to a race condition.

( Note :- Since I did not see a discussion forum for IOI, I am
posting this query under General Q/A. If there is a more specific
forum, please let me know and I shall move my query there ).

Regards,
C. Mahesh

Phone :-

Work Place : +1-203-890-7981 Mobile : +1-203-252-4039