Primary vs. Secondary Market Execution

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Imported from previous forum

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Most of the shares of mutual funds can be traded both on the primary market (mutual fund is counterparty) and on the secondary market (other broker is counterparty).
Just for clarification: Is it correct for the buy side client to use value R = Primary peg (primary market - buy at bid/sell at offer) of tag 18 (ExecInst) to indicate that the order should be executed on the primary market by the broker ?

Any advice on this would be appreciated,

Josef

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[ original email was from Ryan Pierce - rpierce@taltrade.com ]
> Most of the shares of mutual funds can be traded both on the primary market (mutual fund is counterparty) and on the secondary market (other broker is counterparty).
> Just for clarification: Is it correct for the buy side client to use value R = Primary peg (primary market - buy at bid/sell at offer) of tag 18 (ExecInst) to indicate that the order should be executed on the primary market by the broker ?

No. That field is used only for Pegged orders. A primary peg is one where an order is pegged to buy at the bid, or sell at the offer. This is the opposite of the market peg, where an order is pegged to buy at the offer, or sell at the bid.

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> > Most of the shares of mutual funds can be traded both on the primary market (mutual fund is counterparty) and on the secondary market (other broker is counterparty).
> > Just for clarification: Is it correct for the buy side client to use value R = Primary peg (primary market - buy at bid/sell at offer) of tag 18 (ExecInst) to indicate that the order should be executed on the primary market by the broker ?
>
> No. That field is used only for Pegged orders. A primary peg is one where an order is pegged to buy at the bid, or sell at the offer. This is the opposite of the market peg, where an order is pegged to buy at the offer, or sell at the bid.
>
> Is there a field in FIX 4.0 to indicate primary market execution?

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[ original email was from Ryan Pierce - rpierce@taltrade.com ]
> Is there a field in FIX 4.0 to indicate primary market execution?

I don’t know of such a field. It may be a valuable thing to define in future versions of the FIX spec.

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[ original email was from Chris Lambert - chris.lambert@emx.co.uk ]
> > Is there a field in FIX 4.0 to indicate primary market execution?
>
> I don’t know of such a field. It may be a valuable thing to define in future versions of the FIX spec.

Could this be addressed by setting “ExDestination” to a suitable value, either ‘0’ = “None” ?

If a more specific indication is preferred a new numerical value could be assigned, e.g. ‘12’ = “Issuer”