General Usage Rules for Submitting Allocation Instructions
Rules associated with submitting allocation instructions.
- An allocation instruction must contain at least one allocation.
- Allocation instructions can partially or fully allocate the bunched trade.
- Allocation instructions can only be submitted to allocate a previously cleared block trade.
- Allocations submitted can be pre-approved for credit or submitted for explicit claim by the clearing firm.
- Pre-approved allocations will not be sent to their respective clearing firms to be explicitly claimed.
- Platform/submitter does not need to provide the trade economics while submitting allocation instructions, and trade economics are not supported on allocation instructions.
- Allocations will be rejected if the block trade specified is not yet cleared. The allocation will also be rejected if the system could not resolve the holding account.
- If the offsetting account specified on the allocation instruction does not match the holding account from the original cleared bunched trade, the allocation instruction will be rejected.
- A single allocation instruction can be submitted with multiple allocations targeting multiple accounts.
- Each allocation submitted will require a unique individual allocation id that will be used to tie the allocation to the corresponding Offseting allocation.
- The notional amount on the allocation will be validated against the remaining amount that can be allocated on the bunched trade. The total allocated quantity cannot exceed the cleared block quantity. Over allocation will result in the complete instruction to be rejected.
- The total quantity on the allocation instruction should be set to the sum of all the allocations in the the allocation instruction.
- While submitting multiple allocations, if one or more allocations failed validations due to an invalid account, only those allocations will be rejected.
- As each allocation is cleared, the submitter of the cleared allocation is notified.
- Upon clearing, each cleared allocation will be assigned a cleared Unique Transaction Identifier (UTI).
- Allocations rejected by clearing firms can be resubmitted.
- Pending allocations can be cancelled / withdrawn for IRS Allocations. A cancel instruction will be rejected if the allocation has already cleared.
- A rejected allocation can be cancelled for IRS Allocations.
- An allocation cannot be voided once an allocation is cleared. This can be accomplished by initiating a clearing firm transfer.
When the clearing firm(s) reject one or more allocations in an allocation instruction, the platform / clearing firm can resubmit the allocations using a different account and clearing firm.
- The instruction can contain one or more allocations.
- The resubmitted allocations can contain the original identifiers (like IndAllocID or bilateral UTI) or new identifiers.
- CME ClearPort will validate the IndAllocID and the Allocation Instruction status to process Resubmitted allocation.
Clearing firm (FCM) Submission Rules
- If the submitter of the allocation instruction is a Clearing Member Firm and the account on the allocation is NOT a position account of that Firm (e.g. it is a different clearing firm's account), the allocation cannot be pre-approved. The allocation will go thru the clearing firm claim workflow.
- The standby FCM will not have the ability to set the pre-approval flag on allocation(s) targeting a different FCM.
- CME Clearing will validate the clearing firm on the account against the Sender ID. If the clearing firm on the account and the clearing firm submitting the allocation are not the same, the pre-approval flag will be ignored.
Attribute Usage in Submissions
Submitting Identifiers to Lookup the Cleared Bunched Order
Submission of one of the following identifiers is required to identify the cleared bunched trade.
Allocation instructions must reference one of four identifiers for the original bunched order trade. If multiple identifiers are sent, they are processed in the following order:
- Cleared Bunched trade UTI
- Bunched trade bilateral (alpha) UTI
- CME ClearPort Assigned Execution ID (Exec ID) (for FX allocations) OR Cleared Trade ID (for IRS allocations)
- Platform assigned Execution ID (ExecID2)
- CME ClearPort will reject the allocation instruction if one missmatch reference id is found in the submission.
- A new allocation instruction must contain only one of the supported key identifiers and will NOT include trade economics.
- The CME ClearPort assigned execution ID will not be supported for allocating IRS trades.
- The clearing assigned Cleared Trade ID will only be supported for allocating IRS trades.
Bunched Trade Bilateral UTI
The submitter can submit the bilateral (alpha) UTI assigned for the original bunched trade to identify the cleared bunched trade.
- Event = “0” identifies that the UTI is an alpha (bilateral) UTI assigned to the block upon execution..
- Typ = “2” identifies that this is a bunched Trade or a block. It is one of the ways to identify the cleared bunched trade.
Rules: CME Clearing will check for the uniqueness of the bilateral UTI’s for within the context of the platform.
Bunched Trade Cleared UTI
The submitter can submit the Cleared UTI assigned by CME clearing for the original bunched side to identify the cleared bunched trade.
- Event = “2” identifies that the UTI is a Cleared UTI.
- Typ = “2” identifies that this is a bunched Trade or a block.
CME Cleared Trade ID
The submitter can submit the CME assigned cleared trade ID for the cleared bunched order trade to identify the cleared bunched trade.
Only supported for IRS allocations.
CME ClearPort Assigned Execution ID
The submitter can submit the CME ClearPort assigned execution ID (ExecID) for the bunched order trade to identify the cleared bunched trade.
Only supported for FX allocations.
Platform Assigned Execution ID
The submitter can submit the platform assigned execution ID (ExecID2) for the bunched order trade to identify the cleared bunched trade.
Submitting Allocation IDs
Individual allocation ID
The IndAllocID is a unique platform assigned ID for the allocation, and it is a required attribute for each allocation. CME Clearing will report the platform assigned execution ID on trade confirms to firms.
- A unique IndAllocID is required for each allocation submitted.
- CME Clearing will look up the allocation using IndAllocID to check if it is duplicate allocation.
- The allocation will be rejected if the IndAllocID is not unique within the submitting platform.
- The platform / clearing firm can resubmit a rejected allocation using the same IndAllocID.
Client order ID for Allocation
The submitter can send an optional client ID (ClOrdID) for the cleared bunched offsetting side and the allocations. The submitter can send an optional client ID for each allocation in the FirmMnem field in the Alloc block. This is a pass thru field, and CME Clearing will send it on messages to the clearing firm.
- This is optional attribute and will not be validated. It is a pass thru field.
- If this client ID is provided, CME Clearing will use it as the client order ID on all allocation offsets.
- If this is not provided, CME Clearing will use the client order ID from the original bunched order side of the asset manager as the client order ID on the allocation offsets.
Submitting the RegTrdID (UTI) for the Allocation
The platform optionally can assign a bilateral UTI, also referred to as the alpha UTI, for each allocation.
- If the submitter does not assign a bilateral UTI, CME Clearing will assign one.
- If the platform / clearing firm submit a bilateral UTI for the allocation, it has to be unique.
- The allocation will be rejected if the platform / clearing firm sends a duplicate bilateral UTI for the allocation.
- If the platform / clearing firm resubmits an allocation after a clearing firm reject, the bilateral UTI can be reused.
Submitting Pre-Approval Details
Credit approval token
The credit approval token is an optional attribute that can be assigned by a SEF or credit hub and sent on the instruction. The token can be sent for:
- The bunched order by specifying it at the message level for the offsetting side.
- The allocation(s) by specifying it at the allocation level at each allocation level.
CME Clearing will not validate credit approval.
CME Clearing will pass the credit approval token through to the clearing firm on cleared trade confirms.
Sample – Submitting Credit Approval Token for the Offsetting Side
Pre-Approval (Risk Limit Check) Flag
The pre-approval flag is an optional attribute in the allocation instruction that indicates the status of the risk limit check performed on the bunched trade or the allocation.
- If an allocation is pre-approved, CME Clearing will not send it to the clearing firm for explicit claim.
- Allocations that are not pre-approved will require explicit claim by the clearing firm and will go through the claim workflow.
- CME Clearing will pass the credit approval token through to the clearing firm on cleared trade confirms.
- If a clearing firm submits the allocation instruction, the pre-approval flag cannot be set unless the clearing firm on the account is the same clearing firm sending the instruction.
The total quantity on the allocation instruction should reflect the sum of all the allocation quantities. The total quantity is required on submissions and will be validated for against the sum of all the allocation quantities.
Submitting Account Aliases
While submitting trades, identifying the parties or entities involved in the trade is crucial to clearing. The clearing account, also referred to as the customer, is one of the most important party roles for trade submission to clearing. Details on getting entity information from CME ClearPort are available in the CME ClearPort Entity Reference API.
Submission of account aliases into CME ClearPort instead of the clearing account is allowed with all the qualifying party roles. It encapsulates the trading firm, clearing account number and clearing firm, allowing use of an external reference for specifying an account. Allowing aliases to be defined at these levels provides the flexibility for trading firms and platforms to represent the account as they know it.Currently a trading firm or a platform may define unique aliases for clearing accounts in CME ClearPort. The following forms of aliases are supported:
Rules: If the offsetting account specified on the allocation instruction does not match the holding account on the original cleared bunched trade, the allocation instruction will be rejected.
You must identify the type of alias and the value of the entity who is the owner of the alias.
Clearing House Assigned Alias
The clearing house can assign an alias for the clearing account. The source attribute identifies if the alias being sent is a custom alias. Note: The identity of the assigner is not required when specifying the clearing house alias.
Trading Firm Assigned Alias
A trading firm or an asset manager can assign an alias to the clearing account. The source (Src) attribute identifies that this is a custom alias. The trading firm will be identified in the Sub tag.
Platform Assigned Alias
CME ClearPort also supports submission of a platform assigned alias. The source (Src) attribute identifies that this is a custom alias. The platform is identified in the Sub tag.
Submitting other Party Roles
The following party roles (R) in the party block are available for use while submitting allocations. Please refer to the validation rules while submitting party roles.
Trading firm to identify the side submitting the trade. For example, PIMCO, BlackRock etc.
Supported value: 7 – Trading Firm
Customer Account and Origin
The account to which a trade is posted or the beneficiary.
Accounts are always associated with a clearing firm and they guarantee the account.
24 – Customer Account
26 – Account Type
The firm that guarantees the account for risk purposes.
Supported value: 4 – Clearing Firm
|Account Alias||/AllocInstrctn/Pty/@R="24 "||Trading firm alias|
A single piece of identification that encapsulates the account, origin and clearing firm, and is assigned by the trading firm.
24 – Customer Account
1 - Trading Firm
A single piece of identification that encapsulates the account, origin and clearing firm, and is assigned by the platform.
24 – Customer Account
3 – Platform
Clearing house assigned alias.
A single piece of identification that encapsulates the account, origin and clearing firm and is assigned by the clearing house.
24 – Customer Account
- The customer account or customer account alias information is required.
- Participants can either submit an account alias or a fully qualified account.
Note: For the IRS allocation submission, only account aliases will be supported.
- If the platform / clearing firm provides an alias, it must indicate whether the alias is trading firm assigned or platform assigned, unless it is a clearing house assigned alias.
- If the participant submits an account (not alias), the clearing firm must be specified.
Attribute Usage in Responses
CME Clearing will echo back all the elements on the submission in the responses.
Cleared Trade ID
The cleared trade ID is an identifier assigned by the clearing system for each cleared side, e.g. the offsetting side and the onsetting side. CME Clearing will send this on the cleared allocation notification to the submitter.
CME Clearing will send these identifiers on cleared trade confirms to clearing firms.
RegTrdID (Cleared UTI) for Allocations
The clearing system will assign a unique cleared UTI for each cleared allocation which is one for the offsetting side and the onsetting side.