Notes on the Allocation Review conference call
Grace Lin / Goldman Sachs (Asia) L.L.C.
10 Jul 2003 6:05AM ETAttendees:
Jim Kaye, Goldman Sachs (London)
Simon Leighton-Porter, Citigroup (London)
Bennon Tan, ADAM
David Pound, HSBC
Peter Kwok, UBS
Angela Pang, Bloomberg
Andrew Au, Goldman Sachs
Grace Lin, Goldman Sachs
Meeting Summary:
Jim Kaye went through the presentation he's given to the European Business Practices committee. The below are some key points:
- changed naming convention as well as cleaned up some messages and rules
- allocation message is now split into 2 messages:
1. allocation instruction (separate msg name) - from buyside to sellside
2. allocation report - from sellside to buyside
- introduced a new set of messages to handle Confirmation Messaging instead of utilizing the Allocation msg before this 4.4 version
- flexible data structures - add meta data to define additional fields
- changed the way of Settlement Instructions are handled
- Confirmation occurs on the account level as opposed to the order level (prior to 4.4) since account-level because most/all mid/back-office infrastructure looks at Confirmation at the trade/subacct level not order level
- instead of bulking a lot of information which doesn't belong to each other in one message, Confirmation information is now broken into its own message e.g., when 100 accts are specified, if a few don't pass validation, the whole message gets held up. With the new structure, only the few failed validation will be held up.
- the most popular approach currently is to use FIX for Allocations while leaving the Confirmation process in Omgeo
- FIX messages do not handle communications to Agents and Custodians so everyone who uses FIX for Settlement Instruction will remain to use SWIFT to handle Delivery Instructions.
Question from Grace: Do you expect people will be adopting this new 4.4 structure with 4.4 or below implementations?
Since 4.4 accomodates better the Allocation, Confo and SI processes, suggest to potentially keep older versions of IOI/Order Routing as lower versions and have separate 4.4 session to handle the post-execution processes.
Simon Leighton-Porter has put together a document which summarizes the 4.4 changes on Allocations and is a practical piece to read for those who plan to implement FIX Allocations. This document is posted under the Asia/Pac Tech Subcommittee Archive.
