Precedence between Tag 1 and Tag 79

1

In Asia, some clients can send client account/exchange trading account in FIX Tag 1 and also in pre-allocation tags (78/79/80). Can we check what is the expected behavior handling and which tags gets the precedence in resolving exchange trading account?

Sample 1: (in this case both accounts are same)

Account( 1): 123456
NoAllocs( 78): 1
Group 0 :
AllocAccount( 79): 123456
AllocShares( 80): 917000

Sample 2: (in this case both accounts are different)

Account( 1): 54321
NoAllocs( 78): 1
Group 0 :
AllocAccount( 79): 123456
AllocShares( 80): 917000

2

Is this between client and broker communication or broker and exchange communication when placing orders?

3

This is between client and broker, where clients (OMS vendor) sends exchange account in both tag 1 and tag 79.

4

Agree with Lisa, its between counterparty involved to decide.
Technically, it is possible for following use cases, depends on your operations/allocations need.

Case 1
Tag 1=[Exchange Account; QFII]
78/79/80=[Allocated account]

Case 2
Tag 1=[Allocated Account]
78/79/80=[Exchange Account, QFII]

5

@sourabhrathi as @peekochanaxe said, if you’re between client and broker it depends. However, that said, typically the AllocAccount(79) should be the account where the AllocQty(80) is to be allocated to once the trade is done and this is typically the (beneficiary or end) account for settlement - it’s no different than when you do a post-trade allocation using AllocationInstruction(35=J). In equities, Account(1) is commonly used for omnibus or holding account at the executing broker.

6

Just to add some use cases of implementation remember from about a year ago:
There might be another account be involved which is an omnibus account in a central trading routing application and the account of the final recipient (let’s say the retail account at a custodian). This is helpful if you do not want to hold all (ten or hundred thousends of) retail accounts in the central trading application but forward the retail account information for settlement to the custodian with the help of the Happens when a remote private wealth management application is connected to the central trading application with its market and broker connectivity.
Even more combinations posible with the help of the Parties and NetesParties Group inside PreTradeAlloc Grp with its tag 79.

7

Thank you for the details. Yes @peekochanaxe , we typically have this scenario for China Connect trading where client / OMS vendor can tag the SPSA ID (exchange account) on sell order to both tag 1 and tag 79. We are making an assumption here that for tagging an SPSA ID (exchange account) with the order tag 1 should take precedence over tag 79; as tag 79 represents the underlying allocation accounts (could be typically alert code) for Operational needs and any additional client specific pre-trade validation for account trading eligibility.

Understand from this convo that putting precedence to tag 1 in this case for exchange account tagging is right thing to do.

8

@sourabhrathi I am not sure if you have seen the guideline provided by FIX for SPSA ID information. FIX has added new PartyIDSource(447) values T for SPSA ID and U for Master SPSA ID with EP262. Additionally AllocAcctIDSource(661)=6 (SPSA ID) can be used to specify that an SPSA ID is in AllocAccount(79).

9

@sourabhrathi if you’re looking to communicate SPSA ID for China Connect please follow the recommended practices (RP) doc that @hanno.klein pointed you to. This document was put together with the FIX APAC committee. You didn’t provide this context in your OP so I didn’t bring it up. I think it is important for APAC to try to follow the RP.