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This page describes workflows associated with submission and successful processing of allocation instructions.

 

Allocation instruction with all allocations pre-approved 

In this scenario, the platform / clearing firm sends an allocation instruction to allocate a previously cleared bunched order trade designating one or more accounts / funds. All the allocations are pre-approved for credit.

The steps are:

  • The platform / clearing firm sends an allocation instruction to allocate a cleared bunched order trade.
  • CME Clearing validates the allocation instruction for the following allocation details:
    • Presence of the bunched trade being allocated in the system.
    • Allocation accounts are valid.
    • Sum of all the allocations doesn’t exceed the block quantity.
  • If the allocations pass validations, CME Clearing notifies the clearing firms of the cleared trades.
  • CME Clearing notifies the submitter of the cleared allocation.

 

 

An alternative scenario is the allocations are credit checked using CME hosted Credit check. The flows are the same as above.

Allocation instruction with multiple allocations (pre-approved) - All allocations processed

In this scenario, the platform / clearing firm sends an allocation instruction with multiple allocations to allocate a previously cleared bunched order trade designating more than one account. The allocations are pre-approved for credit.

The steps are:

  • The platform / clearing firm sends an allocation instruction to allocate a cleared bunched order trade.
  • CME Clearing validates the allocation instruction for the following allocation details:
    • Presence of the bunched trade being allocated in the system.
    • Allocation accounts are valid.
    • Sum of all the allocations doesn’t exceed the block quantity.
  • If the allocations pass validations, CME Clearing notifies the clearing firms of the cleared trades.
  • CME Clearing notifies the submitter of the cleared allocation.

Allocation instruction with all allocations requiring explicit claim - Successfully processed

In this scenario, the platform / clearing firm sends an allocation instruction to allocate a previously cleared bunched order trade designating one or more accounts / funds. All the allocations require explicit claim by the clearing firms.

The steps are:

  • The platform / clearing firm sends an allocation instruction to allocate a cleared bunched order trade.
  • CME Clearing validates the allocation instruction for the following allocation details:
    • Presence of the bunched trade being allocated in the system.
    • Allocation accounts are valid.
    • Sum of all the allocations doesn’t exceed the block quantity.
  • If the allocations pass validations, CME Clearing sends the allocations to the clearing firms for explicit claim, and the platform receives a pending clear notification.
  • As the clearing firms claim, CME Clearing notifies the submitter of cleared allocations.
 

The flows are the same when multiple allocations are submitted in the same instruction. CME Clearing sends a pending clear notification for each allocation. CME Clearing then notifies the submitter as each allocation clears.

 

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