The CAT NMS Plan defines an Allocation Report as “a report made to the Central Repository by an Industry Member that identifies the Firm Designated ID for any account(s), including subaccount(s), to which executed shares are allocated”. This includes the booking of shares/contracts into the same account for which an order was originally placed, and the booking of shares/contracts into an account based on allocation instructions (e.g., subaccount allocations).
- FAQU16. Are accounts maintained by a clearing firm that are owned or controlled by another broker-dealer considered “client” accounts for purposes of reporting Allocation Reports to CAT? For example, shares are booked into the average price account of an Introducing Broker (IB) dealer before the IB provides allocation instructions to the final customer accounts. Is the booking of shares into the IB owned or controlled average price account required to be reported as an Allocation by the clearing firm to CAT?
No, allocations to any account owned or controlled by a broker-dealer are not required to be reported to CAT as Post-Trade Allocation (MEPA) or Option Post-Trade Allocation (MOPA) events. Allocations to an account owned or controlled by a broker-dealer may be voluntarily reported to CAT but must be identified as a BD account as prescribed in the technical specifications. Note that average price accounts designated for exclusively for a specific customer (not a broker-dealer) are always considered customer accounts.
- FAQU22. What are the requirements for clearing firms to report allocations to average price accounts of an Introducing Broker that may be exclusively for a specific client of the Introducing Broker?
If the average price account is held in the name of a specific client of the Introducing Broker or is associated in the clearing firm’s systems with a specific client of the Introducing Broker, then allocations to the average price account must be reported to CAT. If the average price account is held in the name of the Introducing Broker and is not associated in the clearing firm’s system with a specific client of the Introducing Broker, then allocations to the average price account are not required to be reported to CAT.
- FAQU21. Is the side value ‘SX’ (Short Sale Exempt) required to be reported on Post-Trade Allocation/Option Post-Trade Allocation (MEPA/MOPA) events?
If the side value ‘SX’ is available in the Industry Member’s booking system, then it should be reported on the MEPA/MOPA. If it is not available in the booking system, then the side value ‘SS’ should be reported on the MEPA/MOPA.
- FAQU19. How should the DVPCustodianID field in the Post-Trade Allocation event (MEPA) be populated when an allocation involves a foreign entity for which a DTC number is known?
The DVPCustodianID field in the Post-Trade Allocation event (MEPA) should accurately reflect the settlement instructions on the account (not the entity) to which shares are placed or from which shares are delivered at settlement. A Depository Trust Company (DTC) number should be reported if the account where the shares are allocated will settle the transaction via DTC. If there is no DTC Number associated with the account, or the shares will settle via a foreign settlement mechanism (e.g., Euroclear), then the value of ‘FOREIGN’ should be used.
- FAQU18. Are Industry Members required to report Amended Allocation events (MEAA) for allocations which occurred before the date an Industry Member is required to report allocation events to CAT?
If the trade date of the allocation is prior to the mandatory reporting date for allocations (Phase 2c for equities and Phase 2d for options), then any amendments made to the allocation after the applicable CAT allocations reporting go-live date are not required to be reported to CAT.
- FAQU17. Are changes to CAT reportable attributes of an allocation after the original booking of shares/contracts that occur post-settlement required to be reported to CAT as an Amended Allocation event (MEAA)?
Changes to CAT reportable attributes of an allocation after the original booking of shares/contracts are required to be reported to CAT as either an Amended Allocation event (MEAA) or the cancellation of a Post-Trade Allocation event (MEPA) followed by a new Post-Trade Allocation event regardless if they occur pre-settlement or post-settlement.
- FAQU20. When converting the price of a non-US dollar currency for the purpose of reporting a CAT Allocation event, is it acceptable to use the end of day conversion rate?
Yes, it would be acceptable to use an end of day currency conversion rate.
Yes. An Allocation Report is required when executed shares/contracts are allocated to an account when the account is purchasing shares (shares are placed in account) and when the account is selling shares (shares are delivered from the account). Designation of a purchase or sale is reported as the “side” of the allocation.
If an allocation is updated such that a CAT reportable attribute is changed after the shares/contracts have been booked in a client account, then an Amended Allocation event (MEAA) must be reported to CAT reflecting the corrected details of the allocation. Changes that do not impact CAT reportable attributes are not required to be reported to CAT as Amended Allocation events. For example, an allocation is booked to an account at 5:15 pm. Subsequently, at 6:30 pm, the clearing firm updates a CAT reportable attribute.