The Split (allocation) event needs a changeAccount primitive instruction

[mgratacos]

Background

Currently Splits (a.k.a allocations) include a partyChange instruction to represent the new counterparty of the allocated trade but it doesn't contain the ability to add/update the account of the "owner" of the allocated trade.

Proposal

We think we would need to add a new accountChangeInstruction that allows adding/updating the account of a party. Please note that currently CDM only allows an optional single account within a party.

More details to follow.

[chrisisla]

Hi @mgratacos,

In securities lending we also perform an allocation when a trade is agreed ((and reallocations can be performed after the trade has been confirmed). This is where a single trade is allocating securities from multiple entities - so you could require 50,000 shares for a trade but 10,000 come from fund1, 15,000 from fund2 and the remaining 25,000 from fund3. We also use a Split to perform this.

I can see no problem with adding an accountChangeInstruction to the Split processing, assuming it will take a Party as input.

You also raise a good point in that the CDM currently only supports one account within a party. Just as an FYI for securities lending we would potentially require 2 (one for cash, one for securities), so this will need to be updated at some point.

Thanks!

[mgratacos]

Agreed @chrisisla. The solution for accountChangeInstruction should consider that we may have multiple accounts within a Party at some near future in CDM.