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Allocation instruction rejected by CME Clearing due to an over-allocation

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.

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 based on the identifiers sent in the allocation instruction.
  • Accounts being allocated to are valid accounts.
  • Sum of all the allocations doesn’t exceed the block quantity.
• In this use case, the allocated quantity exceeds the block trade quantity.
• The submitter receives a negative acknowledgement.

Allocation instruction w/ multiple allocations (explicit claim) – one of the allocations rejected by CME Clearing

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 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 based on the identifiers sent in the allocation instruction.
  • Accounts being allocated to are valid accounts.
  • Sum of all the allocations doesn’t exceed the block quantity.

• One of the allocations fails account validations.
• The submitter receives a negative acknowledgement for the rejected allocation.
• The valid allocations are sent to the clearing firms for explicit claim and the platform receives a pending clear notification for each valid allocation.
• As the clearing firms claim, CME Clearing notifies the submitter of cleared allocations.

Allocation rejected by clearing firm and resubmitted by platform

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. After a clearing firm rejects one of the allocations, the platform re-submits the allocation.

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 allocation details.
  • Presence of the bunched trade being allocated in the system based on the identifiers sent in the allocation instruction.
  • Accounts being allocated to are valid accounts.
  • Sum of all the allocations doesn’t exceed the block quantity.

• CME Clearing sends the valid allocations to the clearing firms for explicit claim, and the platform receives a pending clear notification for each valid allocation.
• As the clearing firms claim, CME Clearing notifies the submitter of cleared allocations.
• In this use case, one of the clearing firms rejects the allocation.
• CME Clearing notifies the platform of the clearing firm reject.
• The platform resubmits the rejected allocation with a different account and clearing firm.
• The rest of the workflow is the same as the Bunched Order Allocation Instruction Submission - Successfully processed.