step-ins and step-outs

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Imported from previous forum

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[ original email was from Tom Vasak - tom.vasak@ssmb.com.au ]
Can somebody explain the use of the terms step-in and step-out, especially with regard to allocations.

Thanks

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> Can somebody explain the use of the terms step-in and step-out, especially with regard to allocations.
>
> Thanks
>
Mr Vasak,
I was wondering whether you already got an answer to this question; I also would like to know what step outs mean in the context of allocations

thx

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[ original email was from Jim Kaye - jim.kaye@gs.com ]
A step out is a situation where a client requests that the executing broker execute an entire order, but a second broker settle (and receive commission for) part of that order. For example, broker 1 may execute 100,000 shares for a client; the client may then ask broker 1 to step out 30,000 shares to broker 2. Broker 1 then settles the remaining 70,000 shares directly with the client, and then delivers the other 30,000 to broker 2 who then settles that with the client. Commissions are shared accordingly.

Step ins are the process in reverse, i.e. in the example above, broker 1 is stepping out and broker 2 is stepping in.

The relevance to allocations comes in the identification of the step in/out broker. The FIX allocations working group is working on some ‘best practices’ in terms of implementing FIX messaging to support these flows - watch this space…

Best regards,

Jim.

> > Can somebody explain the use of the terms step-in and step-out, especially with regard to allocations.
> >
> > Thanks
> >
> Mr Vasak,
> I was wondering whether you already got an answer to this question; I also would like to know what step outs mean in the context of allocations
>
> thx
>