A FIX Allocation Instruction is a message type within the Financial Information eXchange (FIX) protocol, used to specify how a block trade, executed on behalf of multiple underlying accounts, should be distributed among those accounts. In crypto institutional trading, this instruction facilitates the post-trade allocation of large digital asset orders, such as those obtained via an RFQ or OTC block trade, to various client or internal sub-accounts.
Mechanism
The mechanism involves a structured data message containing details such as the block trade’s execution price and quantity, along with a list of individual allocations, specifying the quantity and account identifier for each underlying client. This message is transmitted from the executing broker or platform to the buy-side firm, streamlining the operational process of trade breakdown and record-keeping.
Methodology
The strategic objective of employing FIX Allocation Instructions in crypto systems architecture is to automate and standardize the complex post-trade reconciliation process, reducing manual errors and operational latency. This methodology supports efficient settlement workflows, particularly for institutional options trading and large-scale digital asset transactions, ensuring accurate attribution of trades to specific portfolios and minimizing post-execution risk.
The FIX Allocation Instruction is a buyside directive for trade allocation, while the Allocation Report is a sellside notification of allocation details.
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