Did You Know? | How to set up Trade Allocation Rules

In APM, you can allocate a trade to more than just 1 fund. This is important, because by allocating 1 order across multiple accounts, you ensure that all accounts are treated fairly and have the same price. This is critical for many managed accounts. It also means you save on paying ticket fees.

Once you’ve created a trade in Fix or OMS, this can be allocated to multiple funds using Allocation Rules. Here, we’re going to talk you through how to set up these Trade Allocation Rules.

1. Where to start

Go to Maintenance
Select ‘Allocation Rules Setup’

2. What to include

A box will appear, and then just fill in the details of your rule. You have to define:

  • Rule Name – as you wish.
  • Rule Description – as you wish.
  • Linked To – choose either Account or Broker, depending upon which basis you want the trade to be allocated.
  • Link ID – the Account Name (if linked to an Account), or Broker Name (if linked to a Broker).
  • Allocation Based On – the desired % allocation for this fund.
  • BCOV/SELL Closeout – this is selected by default.

The second box underneath lets you allocate the split to the second fund. Further boxes will appear, the more funds you wish to allocate to in the same rule.

Check or uncheck ‘Randomisation’:

  • When an order cannot be fully allocated to the defined split we will have an uneven allocation (remainder).
  • This may be due to the order not fully filling in the market before completion.
  • In this case we can assign the remainder(s) in a round robin process or randomly allocate.
  • To use the random function, select the ‘Randomisation’ feature.

By selecting ‘Add Split’, you can add as many splits as you like.

Once the trades have been allocated a total of 100% across all funds, you can click ‘Add Rule’.

The Trade Allocation Rule has now been set up.

This entry was posted in Did You Know?. Bookmark the permalink. Both comments and trackbacks are currently closed.