FIX Allocations 4.0

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Imported from previous forum

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[ original email was from Dianne Cincotta - dcincotta@macgregor.ws ]
Since it was not addressed until FIX 4.1, how are step-outs handled in FIX 4.0? Specifically, who and how is the step-in broker instructed?

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The only difference between FIX 4.1 and 4.0 re: step-outs in Allocations was the addition of NotifyBrokerOfCredit(208). If you need this feature, you need to either 1) use 4.1 or 4.2; 2) ask counterparties to accept tag 208 in 4.0; or 3) create a user defined tag number for tag 208 and ask counterparties to accept that.

As an example if MutualFundComplexA buys 1000 shares of IBM from BrokerA and wants to have BrokerA step-out to BrokerB, I believe you could send BrokerA the following (within AllocAccounts repeating group in the Allocation message):
ProcessCode(81)=Step-out(value 3)
BrokerOfCredit=BrokerB
ExecBroker=BrokerA

  • whether or not BrokerA forwards this info on to BrokerB on MutualFundComplexA’s behalf would be a business agreement/rule, I guess. (or NotifyBrokerOfCredit(208) usage)

I suppose another scenario would be if BrokerA stepped out completely on the trade for all accounts to BrokerB and it might be valid for MutualFundComplexA to send an Allocation message to BrokerB (versus or in addition to BrokerA) with the following:
ProcessCode(81)=Step-in(value 2)
BrokerOfCredit=BrokerB
ExecBroker=BrokerA

I, honestly, am not an expert on step-outs but those are my thoughts.

> Since it was not addressed until FIX 4.1, how are step-outs handled in FIX 4.0? Specifically, who and how is the step-in broker instructed?
>