Market practice for clearing firms

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Imported from previous forum

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Hi,

I am looking at specifying the FIX interface for a firm that provides clearing services to (mostly) retail / small institutional brokers.

The firm’s clients will send market/client side trades (post-trade) to the clearing firm for clearing, settlement and for some clients, confirmation to the end investor.

So requirements are:

  • client firms need to send us details of the market / client side trades they have done and want settled (incl fee breakdown and override slmt instructions)
  • clearing firm needs to ack/nack these trade messages
  • in some cases, client trade report is not fully figured trade (stamp not calculated etc) and clearing firm will adjust calculated figures and needs to report the fully figured trade back to client.

I think I have 2 approaches

  1. use the TradeCaptureReport seemed the most suitable message as it can be used for (spec 5.0SP2) “relaying Confirmed trades to various parties not direcvtly involved in the execution e.g. … clearing firms…”.

Clients would send TradeCaptureReport messages (One party Pass-thru mode) which the clearing firm would ack/nack with TradeCaptureReportAck message. Any adjustments to the trade details would be reported by the clearing firm back to the client as a TradeCaptureReport (TradeReportTransType = Replace"). Not sure if having a replace generated from the clearing firm, without and amendment being instigated by the client, would create an issue?

  1. use the Confirmation / Confirmation_Ack messages in a similar way. Again, having a Replace Confirmation generated by the clearing firm may be a problem.

I’m favouring the TCR message at the moment but was wondering whether there was some market practice for this type of message flow with clearing firms?

Comments / thoughts / other options greatly appreciated.

Regards