Omgeo Central Trade Manager SM Equity Trade Commissions: Best Practices. June 10, 2013

Transcription

1 Omgeo Central Trade Manager SM Equity Trade Commissions: Best Practices June 10, 2013

2 Copyright 2013 Omgeo LLC. All rights reserved. This publication (including, without limitation, any text, image, logo, compilation, code and/or design) is proprietary and protected by copyright. This publication is for exclusive use by users authorized by Omgeo LLC. If you received this publication from Omgeo by any electronic medium, you are granted a limited, non-exclusive, non-transferable, non-sublicensable, and freely revocable license. This license enables you to download and store this publication on your computer and print copies for your own use. Except if and as authorized by the foregoing, no part of this publication may be printed, stored, reproduced, copied, altered, modified, posted, distributed, transmitted, displayed, published, sold, licensed, or used in any form or by any means, without Omgeo s prior written approval. Omgeo has attempted to ensure the accuracy, timeliness, and completeness of this publication, but makes no warranties and assumes no responsibility relating thereto. The content of this publication may change from time to time without notice; readers are advised to refer to the latest version available. Omgeo and the Omgeo logo are registered service marks owned by Omgeo LLC, 22 Thomson Place, Boston, MA All names of Omgeo services referenced herein are either registered service marks or service marks of Omgeo LLC in the United States and elsewhere. Other product or company names appearing in this publication are trade or service marks of their respective owners. The U.S. Securities and Exchange Commission regulates several Omgeo services. For more information, visit Omgeo has approved this document for public distribution. The examples, pictures, and data are for illustrative purposes only. This document contains no actual trade data. Publication Date: June 10, 2013 Publication Code: CT553 Service: Omgeo Central Trade Manager Title: Equity Trade Commissions: Best Practices

3 TABLE OF CONTENTS Preface... 5 Audience... 5 Change in this Version... 5 Related Documents and Training... 5 Questions?... 5 Best Practices... 7 Introduction... 7 How Commissions are Used in Omgeo CTM... 7 Terms... 7 Additional Documentation... 8 Submitting Commissions in the Direct XML Interface... 8 Commissions Fields... 9 Commission Sharing Basis Indicator... 9 Commission Type Amount Commission Reason Code Commission Calculation Based on Submission Type Submitting a TradeDetail Only Submitting a TradeDetail and TradeLevel Submitting Commissions in Other Omgeo Interfaces Message Translation Interface Broker/Dealers Investment Managers FIX Interface Broker/Dealers Submitting Blocks and Confirmations/Contracts Investment Managers Submitting Blocks and Allocations Trade Blotter Quick Entry Trades Full Trade Entry Trades Omgeo Connect Trade Level Commissions Trade Detail Commissions Directed Commissions Equity Trade Commissions: Best Practices 3

4 Table of Contents Directed Commission Fields Directed Commission Examples Direct XML Interface Message Translation Interface for Broker/Dealers Message Translation Interface for Investment Managers FIX Interface Trade Blotter Net Commissions Settlement and Depository Notification Mapping Mapping to Settlement Information Mapping to Enhanced Settlement Notification Mapping to Canadian Depository for Securities Omgeo Central Trade Manager June 10,

5 PREFACE This document defines terminology and fields relating to block and allocation or confirmation/contract commissions. It describes workflows and provides examples for various interfaces, including Omgeo Central Trade Manager SM (Omgeo CTM) and Omgeo Connect SM. Audience This document is for broker/dealers who use Omgeo CTM. Change in this Version This version includes the following: Removes all instances of OASYS Global SM, which Omgeo plans to retire on June 30, Updates the link to the Client Contact Center, which provides new features and usability enhancements and launches on June 17, Related Documents and Training For related documents and all documents referenced in this manual, go to documentation. Omgeo also offers training to clients on how the product works and how to use it. Course information and a calendar of offerings are available at Questions? Omgeo s Client Contact Center (CCC) provides general assistance and technical help. Visit to: Enter a service request or check the status of an existing service request Search our knowledge base Access our library of documentation Obtain contact information Equity Trade Commissions: Best Practices 5

6 Preface Omgeo Central Trade Manager June 10,

7 BEST PRACTICES Introduction This document outlines best practices equity trade commission practices. How Commissions are Used in Omgeo CTM Executing broker/dealers typically charge a commission when an investment manager buys or sells an equity. Omgeo CTM represents a commission as a flat amount or percentage. Omgeo CTM investment managers and broker/dealers can submit and match on commission information. Omgeo CTM uses commission information in these ways: Matching Investment managers can establish a Level 2 (L2) matching profile to compare commission amounts to its broker/dealer counterparty s commission amount. Settlement Notification For investment managers who subscribe to Settlement Notification, Omgeo CTM maps the broker/dealer s commission information to the investment manager s SWIFT instruction (MT541 or MT543). Omgeo CTM forwards the MT54x to the custodian and interested parties. Third Party Notification For investment managers who subscribe to Enhanced Settlement Notification, Omgeo CTM sends copies of settlement instructions to interested parties. Directed Commissions Investment managers can inform broker/dealers that commissions for an allocation are soft, hard, or directed to a broker of credit. Net Commissions Investment managers can inform broker/dealers about whether commissions for an allocation are included, or in addition to, gross consideration on a block. Terms Table 1 describes terms used in this document. Table 1 Terms Omgeo Term auto-generated TradeLevel trade component TradeDetail TradeLevel Description As an option, Omgeo CTM creates a block (TradeLevel) for a trade side when you submit an allocation or confirmation/contract without submitting a block. Block-level clients set TradeLevelExpected to N. If a party submits additional allocations or confirmations/contracts, Omgeo CTM updates the information in the auto-generated TradeLevel. allocation, confirm, contract, or block allocation, confirm, or contract block Equity Trade Commissions: Best Practices 7

8 Best Practices The following fields in this document require controlled values found in the Common Reference Data, which is available on CommissionReasonCode PartyRole CommissionSharingBasisIndicator PartyValue CommissionType For example, the CommissionSharingBasisIndicator field indicates how a commission amount is expressed numerically and allows only the following values: FLAT (per share) PERC (percent) PERU (amount) Note The term you in this document refers to broker/dealers and investment managers unless otherwise noted. Additional Documentation Table 2 lists documentation located on for more information about how to populate commission information for your Omgeo CTM interface. Table 2 Omgeo Documentation for Omgeo CTM Interfaces Omgeo CTM Interface/Area of Interest Direct XML Interface Trade Blotter Message Translation Interface (MTI) Financial Information exchange Interface (FIX) Documentation XML Message Specification: Debt/Equity and Common Messages Trade Blotter Reference: Broker/Dealers Trade Blotter Reference: Investment Managers Message Translation Interface Specification: Broker/Dealers Message Translation Interface Specification: Investment Managers FIX Interface Specification: Broker/Dealers FIX Interface Specification: Investment Managers Submitting Commissions in the Direct XML Interface The direct XML interface provides the following Commissions composite in the TradeDetail and TradeLevel. The composite enables you to submit commission values for allocations, contracts, blocks, or both. Commission information is optional. When you provide a value in the CommissionSharingBasisIndicator, Omgeo CTM requires the CommissionType and Amount. Omgeo Central Trade Manager June 10,

9 Submitting Commissions in the Direct XML Interface Depending on the CommissionType, Omgeo CTM requires information in additional fields. TradeDetail Omgeo CTM allows up to four Commissions composites in a TradeDetail. TradeLevel Omgeo CTM allows up to four TradeCommissions composites in a TradeLevel. Note XML fields prefixed with Trade typically indicate that the field applies to a block. Commissions Fields This section describes the fields Omgeo CTM uses to construct commission information. Commission Sharing Basis Indicator The required CommissionSharingBasisIndicator field takes a Common Reference Data value that describes how Omgeo CTM calculates the commission type for a given trade component. Table 3 describes the allowed values. Table 3 Allowed CommissionSharingBasisIndicator Values Value Category Description Notes FLAT Flat currency amount For an allocation, contract, or block, commission is expressed in the traded currency and follows currency precision rules. If the CommissionType is TCOM, use FLAT in this field or Omgeo CTM generates error S Auto-generated TradeLevels always insert FLAT in this field when CommissionType is TCOM. A CurrencyCode is required when FLAT is provided or Omgeo CTM generates error S PERC PERU Percentage amount Per-unit amount Commission is a percent of the trade amount. To send basis points, set the CommissionSharingBasisIndicator to PERC and divide the Amount field by 100. Commission is an amount per share; that is the number of units of the trade currency, payable per share. Do not provide a CurrencyCode when PERC is provided in this field or Omgeo CTM generates error S A CurrencyCode is required when PERU is provided or Omgeo CTM generates error S Equity Trade Commissions: Best Practices 9

10 Best Practices Commission Type The required CommissionType field is a Common Reference Data value that describes the nature of the commission for a given trade component. Table 4 describes the allowed values. Table 4 Allowed CommissionType Values Value Category Description EXEC TradeDetail Executing broker/dealer s commission on a trade component when an investment manager buys or TradeLevel sells a security. Buy and sell-side clients trading equities use only EXEC as commission type. LOCO SPCN TCOM TradeDetail TradeLevel TradeDetail TradeLevel TradeDetail total TradeLevel total Local broker/dealer s commission on a trade component. Omgeo reserves this commission type for future use. Special concession commission on a trade component. This commission is the amount of a drawdown or other reduction from, or in addition to, the deal price. Omgeo reserves this commission type for future use. Total commission amount for the trade component. Each trade component can have its own TCOM. When Omgeo CTM receives one or more TradeDetail commission types and no total commission, it creates the total commission (TCOM) for that trade component. Each trade component can have its own TCOM. An investment manager sends commission information into Omgeo CTM on the block or allocation to match with the values on the broker/dealer s block or contract. When matching, Omgeo CTM only compares counterparties TCOM. It does not compare any other commission types. Example: Suppose an investment manager sends in CommissionType=SPCN and a FLAT amount of $5.00 USD. If the broker/dealer sends in CommissionType=EXEC and a FLAT amount $5.00 USD, the corresponding TCOM values created by Omgeo CTM match exactly. Suppose instead that the broker/dealer sent in a CommissionType=EXEC and a FLAT amount of $4.00 USD. If the investment manager s L2 matching profile for this type of trade has the matching tolerance EXCT (exact), the corresponding TCOM values mismatch. Commission Type Submission Rules. The following rules apply to CommissionType submissions for all Omgeo CTM clients: Submit up to four CommissionType values on a single trade component using this document: You can submit the same CommissionType value more than once (up to three instances). You can submit TCOM only once. Each trade component can have its own TCOM value. If you submit only TradeDetails, Omgeo CTM generates a TradeLevel and calculates TCOM on the block. It calculates the sum of the total commissions for the underlying trade components. If you submit three CommissionType values on a trade component, Omgeo CTM returns four types (TCOM is the fourth) on the InfoResponse and InfoSettlementResponse messages. Except for TCOM, any values you submit in the CommissionType field result in response messages that contain auto-generated TradeDetail and TradeLevel CommissionType (total) values. When you submit a TCOM CommissionType value or when Omgeo CTM generates TCOM, Omgeo CTM uses that value for Level 2 (L2) matching. A client-generated TCOM value does not have to equal the sum of each of the underlying trade components. Omgeo Central Trade Manager June 10,

11 Submitting Commissions in the Direct XML Interface Amount The required commission Amount field uses a 17d syntax, which indicates: The field can have up to 16 digits and one comma. The mandatory comma represents the decimal for all currencies. Examples: 50,20 USD = $ ,12 GBP = 12,345,678,912, , JPY = 30,500,250 Commission Reason Code The optional CommissionReasonCode field is a Common Reference Data type that describes the reason for the commission. Table 5 describes each of the allowed values. Table 5 Allowed CommissionReasonCode Values Value Description Value Description ANAL Analysis PRIC Pricing Services CUST Custody RESE Reserved DIRE Directed RSRC Research EXEC Execution SODO Soft Dollar FUSA Fund Sales UNDE Underwriting NONE None Equity Trade Commissions: Best Practices 11

12 Best Practices Commission Calculation Based on Submission Type Omgeo CTM calculates commission amounts depending on how you submit trade components. Submitting a TradeDetail Only When you only submit a TradeDetail (TradeLevelExpected=N), Omgeo CTM generates a TradeLevel that both calculates and totals all TradeDetail commission amounts (Figure 1). Figure 1 Commission Generation When Submitting TradeDetails Only Omgeo Central Trade Manager June 10,

13 Submitting Commissions in the Direct XML Interface Submitting a TradeDetail and TradeLevel When you submit one or more TradeDetails without a TCOM value, Omgeo CTM uses your detail types and values to calculate the total commissions for each TradeDetail. In this example, the client submits a TCOM value on the TradeLevel. Figure 2 illustrates this scenario using the same values in Figure 1. Figure 2 Commission Generation for Submitted TradeDetails and TradeLevel Equity Trade Commissions: Best Practices 13

14 Best Practices Submitting Commissions in Other Omgeo Interfaces This section provides the fields in each Omgeo CTM interface where investment managers and broker/dealers provide commission information. Note For information on submitting commissions in the direct XML interface, Submitting Commissions in the Direct XML Interface. Message Translation Interface The Message Translation Interface (MTI) is a file-based interface that allows broker/dealers and investment managers to send CSV format files to Omgeo CTM. Omgeo CTM accepts the files and then maps them to XML messages. Broker/Dealers Broker/dealers trade components to Omgeo CTM and receive an investment manager s allocations and final trade data from Omgeo CTM. Broker/dealers submit and receive commission information in the following fields: CommissionSharingBasisIndicator CommissionType CommissionAmount CommissionReasonCode Table 6 lists the transactions and records in which these fields occur. Table 6 Omgeo CTM MTI for Broker/Dealers Commission Information Transaction import_eb_block import_contract import_contract export_allocation export_match_agreed_trade Example: Record block_commissions contract_commissions allocation_commissions common_view_block_commissions common_view_contract_commissions block_commissions,flat,exec,100 Omgeo Central Trade Manager June 10,

15 Submitting Commissions in Other Omgeo Interfaces Investment Managers Investment managers submit only TradeDetails to Omgeo CTM. Omgeo CTM generates a TradeLevel with commission information on their behalf (Table 7). Table 7 Omgeo CTM MTI for Investment Managers Commission Information File Field Format Description Outbound to Omgeo CTM New or Amended TradeDetail Inbound to Investment Manager Status File Examples: Outbound Record 1: 2= =USD 37=25 Total Allocation Commission (TCOM) (37) Total Block Commission (19) Outbound Record 2: 2= =USD 37=50 Numeric, positive value Numeric, positive value Inbound Record 3: 2= =USD 19=75 37=50 For each allocation in a block, provide a value in this field. If there is a value and the value is not or.00, Omgeo CTM maps the commission. Sum of Total Allocation Commission (TCOM) (37) values that share the same MasterReference (2) value. FIX Interface The following examples show how Omgeo CTM requires commission information FIX messages for broker/dealers and investment managers using the FIX interface. The Commissions (12) tag specifies the TradeDetail total commission amount. Note Omgeo CTM requires the total commission breakdown in the NoMiscFees (136) repeating groups described in Table 8, Table 9, and Table 10. Broker/Dealers Submitting Blocks and Confirmations/Contracts Broker/dealers submit commissions/contracts on the Trade Capture Report (AE) for blocks and the Confirmation (AK) for contracts. Block Commissions. Table 8 describes how to broker/dealers construct block commissions in the Trade Capture Report (AE). Table 8 Broker/Dealer Block Commission Trade Capture Report (AE) Tag FIX Field Value CB: Standard Header (MsgType=AE) 9874 OmgeoNoBlockCommissions OmgeoBlockCommissionType EXEC (Executing broker/dealer amount) 12 Commission CommType 3 (Amount) 479 CommCurrency GBP 9867 OmgeoCommissionReason EXEC (Execution Commission) Example: 9874=1 12= =3 479=GBP 9865=EXEC 9867=EXEC Equity Trade Commissions: Best Practices 15

16 Best Practices Confirmation/Contract Commissions. Table 9 describes how broker/dealers submit commissions on a contract in the Confirmation (AK). Table 9 Broker/Dealer Allocation Commission Confirmation (AK) Tag FIX Field Value CB: Standard Header (MsgType=AK) 12 TCOM amount CommType 3 (absolute) 479 CommCurrency GBP 136 NoMiscFees MiscFeeAmt MiscFeeCurr GBP 139 MiscFeeType 3 (local commission) 891 MiscFeeBasis 0 (absolute) 137 MiscFeeAmt MiscFeeCurr GBP 139 MiscFeeType 103 (EXEC commission) 891 MiscFeeBasis 0 (absolute) Example 12=25 13=3 479=GBP 136=2 137=10 138=GBP 139=3 891=0 137=15 138=GBP 139= =0 Investment Managers Submitting Blocks and Allocations Investment managers submit blocks and allocations on the Allocation Instruction (J). Block Commissions. Table 10 describes how investment managers construct block commissions in the Allocation Instruction (J). Table 10 Investment Manager Block Commission Allocation Instruction (J) Tag FIX Field Value CB: Standard Header (MsgType=J) 9874 OmgeoNoBlockCommissions OmgeoCommSharingBasisIndicator FLAT 9865 OmgeoBlockCommissionType TCOM 9866 OmgeoBlockCommissionAmount OmgeoBlockCommissionCurrency GBP 9867 OmgeoCommissionReason EXEC Example: 9874=1 9873=FLAT 9865=TCOM 9866= =GBP 9867=EXEC Omgeo Central Trade Manager June 10,

17 Submitting Commissions in Other Omgeo Interfaces Allocation Commissions. Table 11 describes how investment managers construct allocation commissions in the Allocation Instruction (J). Table 11 Investment Manager Allocation Commission Allocation Instruction (J) Tag FIX Field Value CB: Standard Header (MsgType=J) 12 Commission CommType 3 (absolute) 479 CommCurrency GBP Example: 12=25 13=3 479=GBP Trade Blotter The trade blotter totals commissions for trade components depending on the trade entry method you select. Quick Entry Trades Figure 3 shows where to enter commissions in the quick entry screen. In the quick entry screen, Omgeo CTM adds the commissions for a TCOM as you enter them in the corresponding fields. Figure 3 Commissions in the Quick Entry Screen Full Trade Entry Trades Figure 4 shows where to enter commissions in the full trade entry screen. In the full trade entry scrren, provides a commission Reason drop-down list box. Figure 4 Trade Detail Commissions in the Trade Blotter Equity Trade Commissions: Best Practices 17

18 Best Practices Omgeo Connect Omgeo Connect supports both Trade Level commissions and Trade Detail commissions. Trade Level Commissions Figure 5 shows the Trade Level Commissions in Omgeo Connect. Figure 5 Trade Level Commissions in Omgeo Connect Trade Detail Commissions Figure 6 shows the Trade Detail Commissions in Omgeo Connect. Figure 6 Trade Detail Commissions in Omgeo Connect Directed Commissions Directed commissions typically apply to a third party, such as a broker of credit, for providing the shares for the transaction. Omgeo CTM investment managers identify the party that receives these commissions. Omgeo Central Trade Manager June 10,

19 Directed Commissions Figure 7 shows two directed commission trade submissions for BACW and ACWF workflows. Read each workflow from left to right. Figure 7 Directed Commission for Omgeo CTM Workflows Directed Commission Fields Table 12 describes the corresponding codes for directed commissions in Omgeo CTM.. Table 12 Directed Commission Codes in Omgeo CTM Omgeo CTM Interface Direct XML Interface and MTI for Broker/ Dealers Field Name Allowed Value Code Descriptions CommissionSharingTypeIndicator CLDI Client Directed Commission belongs to a third party, typically a broker of credit or the step-in broker that provided the shares for the transaction. SOFT Soft A service is provided, such as research, and no payment is made Trade Blotter Comm Sharing Type Indicator Same as direct XML interface. MTI for Investment Managers HardSoftDir (26) H Hard This legacy field is not mapped to Omgeo CTM. Do not use it as a value for HardSoftDir (26). S Soft Omgeo CTM maps this field to the SOFT XML value, but no values are set for the broker of credit PartyType and PartyValue. D Directed Omgeo CTM maps this field to the CLDI XML value. Submit the XML PartyValue equivalent field later in the message using field, Other Broker of Credit (44). If you omit field 44, then Omgeo CTM sets NOT SPECIFIED in the BrokerOfCredit PartyValue field. FIX Interface OmgeoCommissionSharingType (9808) Same as direct XML interface. Equity Trade Commissions: Best Practices 19

20 Best Practices Directed Commission Examples This section provides examples of the directed commissions fields for each Omgeo CTM interface. Direct XML Interface Table 13 describes how to populate each field in the DirectedCommission composite. Table 13 Directed Commissions in the Omgeo CTM Direct XML Interface Field CommissionSharingTypeIndicator=CLDI PartyRole=BRCR PartyType=OTBC PartyValue=ABN Example: Description Commission sharing type is CLDI (client directed). The role of the beneficiary of the directed commission is BRCR (broker of credit). The type of broker of credit is OTBC (other broker of credit). The party value or commission beneficiary is ABN AMRO....<DirectedCommission> <CommissionSharingTypeIndicator>CLDI</CommissionSharingTypeIndicator> <BeneficiaryofCommissions> <BrokerOfCredit> <PartyRole>BRCR</PartyRole> <PartyType>OTBC</PartyType> <PartyValue>ABN</PartyValue> </BrokerOfCredit> </BeneficiaryofCommissions> </DirectedCommission>... Message Translation Interface for Broker/Dealers Table 14 describes how to populate directed commission fields in an MTI Outbound file, which maps to a new TradeDetail. Table 14 Directed Commissions Message Translation Interface for Broker/Dealers Field CommissionSharingTypeIndicator=CLDI BrokerOfCreditRole=BRCR BrokerOfCreditType=OTBC BrokerOfCredit=ABN Example:...CLDI,BRCR,OTBC,ABN... Description Commission sharing type is CLDI (client directed). The role of the beneficiary of the directed commission is BRCR (broker of credit). Omgeo CTM maps BRCR to the PartyRole XML element. The type of broker of credit is OTBC (other broker of credit). Omgeo CTM maps OTBC to the PartyType XML element. Commission beneficiary is ABN (ABN AMRO). Omgeo CTM maps ABN to the PartyValue XML element. Omgeo Central Trade Manager June 10,

21 Directed Commissions Message Translation Interface for Investment Managers Table 15 describes how to populate directed commission fields in an MTI Outbound file, which maps to a new TradeDetail. Table 15 Directed Commissions Message Translation Interface for Investment Managers Field HardSoftDir (26)=D Other Broker of Credit (44)=ABN Example:... D,<27-43>, ABN,<45-148)... Description Commission sharing type is D (directed). Omgeo CTM maps CLDI to the CommissionSharingTypeIndicator XML element. Commission beneficiary is ABN (ABN AMRO). Omgeo CTM maps ABN to the PartyValue XML element. FIX Interface Table 16 describes how investment managers submit directed commissions in an Allocation Instruction (J), and how broker/dealers can expect to receive directed commissions. Table 16 Directed Commissions from Investment Manager Allocation Instruction (J) Field, Tag, and Value Description CB: Standard Header (MsgType=J) NoNestedPartyIDs (539)=1 Number of parties eligible for directed commission beneficiaries is 1. NestedPartyID (524)=ABN Commission beneficiary is ABN (ABN AMRO). Omgeo CTM maps ABN to the PartyValue XML element. NestedPartyIDSource (525)=U Type of commission is directed. Omgeo CTM maps CLDI to the CommissionSharingTypeIndicator XML element. NestedPartyRole (538)=EXEC The role of the beneficiary of the directed commission is EXEC (executing broker). Omgeo CTM maps EXEC to the PartyRole XML element. OmgeoCommissionSharingTypeIndicator (9808)=CLDI Commission sharing type is CLDI (client directed). Omgeo CTM maps CLDI to the CommissionSharingTypeIndicator XML element. Example:...35=J...<Start Nested Parties Component Block> 539=1 524=THIRDPARTY 525=U 538=EXEC <End Nested Parties Component Block>9808=CLDI... Note If a commission indicator is not provided, Omgeo assumes the commission is Hard. Table 17 describes how broker/dealers submit directed commissions in a Confirmation (AK) Table 17 Directed Commissions from Broker/Dealer Confirmation (AK) Field and Tag Value CB: Standard Header (MsgType=AK) TCOM amount (12) 10 (calculated by multiplying NoMiscFees (136) by MiscFeeAmt (137) CommType (13) 3 (absolute) CommCurrency (479) GBP (commission currency is British Pound Sterling) NoMiscFees (136) 1 (one commission fee) MiscFeeAmt (137) 10 (commission amount) MiscFeeCurr (138) GBP (commission currency is British Pound Sterling) MiscFeeType (139) 3 (local commission) MiscFeeBasis (891) 0 (absolute) OmgeoCommissionReason (9867) DIRE (Directed Commission) Example:...12=10 13=3 479=GBP 136=1 137=10 138=GBP 139=3 891=0 9867=DIRE... Equity Trade Commissions: Best Practices 21

22 Best Practices Trade Blotter Table 18 describes how to populate directed commissions fields in the trade blotter. Table 18 Omgeo CTM Trade Blotter Field Comm Sharing Type=CLDI Party Role=BRCR Party Type=OTBC Party Value=ABN Description Commission sharing type is CLDI (client directed). The role of the beneficiary of the directed commission is BRCR (broker of credit). Omgeo CTM maps BRCR to the PartyRole XML element. The type of broker of credit is OTBC (other broker of credit). Omgeo CTM maps OTBC to the PartyType XML element. Commission beneficiary is ABN (ABN AMRO). Omgeo CTM maps ABN to the PartyValue XML element. Net Commissions Type of price (TypeOfPriceIndicator) indicates if commission is included as part of gross consideration on a block. Table 19 describes the Omgeo CTM fields and allowed values used for net commission. Table 19 TypeOfPriceIndicator XML Element (Net Commission) Code Description AVER Average Price Average price of instrument EXEC Executed Price Executed price of instrument NET1 Net Price Net of all charges, fees, and taxes Omgeo CTM Direct XML Interface Broker/dealers provide net commission in TradeLevel/TradeLevelInformation/TypeOfPriceIndicator XPath. Omgeo CTM Message Translation Interface (MTI) Broker/dealers provide net commission in the TypeOfPriceIndicator1 field in the trade_info record of the import_eb_block and import_contract transactions. Omgeo CTM FIX Interface Omgeo CTM automatically maps net commission from FIX to XML for fixed income trades. Settlement and Depository Notification Mapping Omgeo CTM provides a Settlement Notification subscription for investment managers to send commission, settlement instructions, and other trade information to their custodians and interested parties. Investment managers can also retrieve broker/dealer delivery instructions for their internal system to construct their own instructions. Mapping to Settlement Information Omgeo CTM allows investment managers to send settlement instructions to a custodian after the Match Agreed trade status in Omgeo CTM is either: MATCH AGREED (MAGR) CANCEL MATCH AGREED (CMAG) Note Enhanced Settlement Notification subscribers can send settlement instructions before MAGR status. See Mapping to Enhanced Settlement Notification for more information. Omgeo Central Trade Manager June 10,

23 Settlement and Depository Notification Mapping When Omgeo builds a SWIFT message for an investment manager, Omgeo CTM does not map the total commission (TCOM) on a block or confirmation/contract to the SWIFT message. Broker/dealers who send only TCOM and no detail fees prevent an investment manager from sending complete detail commission information to the custodian. The following guidelines apply: If multiple instances of detail commission types are provided on a client message, Omgeo CTM does the following: Aggregates amounts with the same commission type Maps only one instance of the commission type to a SWIFT message Omgeo CTM only maps detail commission types provided on the confirmation/contract (TradeDetail) to a SWIFT message. Mapping to Enhanced Settlement Notification Enhanced Settlement Notification (also known as Third Party Notification) is an Omgeo CTM subscription option. This subscription option sends SWIFT or comma-separated value (CSV)-formatted messages to custodians and interested parties when the trade status is: MATCH AGREED (MAGR) CANCEL MATCH AGREED (CMAG) pre-magr (in some cases) Mapping to Canadian Depository for Securities Omgeo offers a real-time link between Omgeo CTM and the Canadian Depository clearing and settlement system (CDSX). When a trade reaches MATCH AGREED (MAGR), Omgeo CTM sends an MT543 to CDSX. In response to a successful receipt, CDSX sends an MT548 to Omgeo CTM, indicating acceptance or rejection of the trade. Omgeo CTM maps broker/dealer detail commissions (not TCOM) on a TradeDetail to the SWIFT instruction and forwards it to the Canadian Depository for Securities (CDS). Equity Trade Commissions: Best Practices 23

24 Best Practices Omgeo Central Trade Manager June 10,

25 A. FIELDCOMPARISONRESPONSE This FieldComparisonResponse direct XML message example provides the InstructingPartyValue and ExecutingBrokerValue total commission amount. See the code snippet in bold on the second page of this example for the field details. Note This FieldComparisonResponse is for a broker/dealer's TradeDetail where the ShowHiddenFields field is set to Y. <?xml version= 1.0 encoding= iso ?> <!DOCTYPE CTM_Message PUBLIC "-//TFN//DTD FieldComparisonResponse 1.3// EN" FieldComparisonResponse.dtd > <CTM_Message> <FieldComparisonResponse> <ResponseHeader> <ProtocolVersion>CM01</ProtocolVersion> <OriginatorOfMessage> <PartyRole>MEOR</PartyRole> <PartyType>TFID</PartyType> <PartyValue>CTMSERVICE</PartyValue> </OriginatorOfMessage> <RecipientOfMessage> <PartyRole>MERE</PartyRole> <PartyType>BIC</PartyType> <PartyValue>BKALMISMCOM</PartyValue> </RecipientOfMessage> </ResponseHeader> <FieldComparisonResponseBody> <RecordsReturnedCount>5</RecordsReturnedCount> <L2MatchingProfileName>EQUITY-DEFAULT</L2MatchingProfileName> <InstructingParty> <PartyRole>INST</PartyRole> <PartyType>BIC</PartyType> <PartyValue>INTEGRTNXXX</PartyValue> <OrgName>Omgeo Integration Test IM INTEGRTNX</OrgName> <OrgName>XX</OrgName> </InstructingParty> <ExecutingBroker> <PartyRole>EXEC</PartyRole> <PartyType>BIC</PartyType> <PartyValue>BKALMISMCOM</PartyValue> <OrgName><![CDATA[Omgeo AutoBrokerResponder - BKALMI]]></OrgName> <OrgName>SMCOM</OrgName> </ExecutingBroker> <TradeLevelIdentifiers> Equity Trade Commissions: Best Practices 25

26 Appendix A. FieldComparisonResponse <CTMTradeSideId> </CTMTradeSideId> </TradeLevelIdentifiers> <TradeDetailIdentifiers> <CTMTradeDetailID> </CTMTradeDetailID> </TradeDetailIdentifiers> <FieldComparisons> <MessageFieldName>ChargesOrTaxes</MessageFieldName> <InstructingPartyValue><![CDATA[<TFEE><><CAD><200,00>]]></ InstructingPartyValue> <ExecutingBrokerValue><![CDATA[<TFEE><><CAD><200,00>]]></ ExecutingBrokerValue> <FieldLevelMatchStatus>MACH</FieldLevelMatchStatus> <FieldLevelL2MatchRule>ChargeMinimumMaximum</ FieldLevelL2MatchRule> </FieldComparisons> <FieldComparisons> <MessageFieldName>Commissions</MessageFieldName> <InstructingPartyValue><![CDATA[<FLAT><TCOM><><CAD><50,00><>]]></ InstructingPartyValue> <ExecutingBrokerValue><![CDATA[<FLAT><TCOM><><CAD><250,00><>]]></ ExecutingBrokerValue> <FieldLevelMatchStatus>MISM</FieldLevelMatchStatus> <FieldLevelL2MatchRule>CommissionMinimumMaximum</FieldLevelL2MatchRule> </FieldComparisons> <FieldComparisons> <MessageFieldName>NetCashAmount</MessageFieldName> <InstructingPartyValue><![CDATA[<><CAD><2250,00>]]></ InstructingPartyValue> <ExecutingBrokerValue><![CDATA[<><CAD><2250,00>]]></ ExecutingBrokerValue> <FieldLevelMatchStatus>MACH</FieldLevelMatchStatus> <FieldLevelL2MatchRule>MoneyMinimumMaximum</FieldLevelL2MatchRule> </FieldComparisons> <FieldComparisons> <MessageFieldName>QuantityAllocated</MessageFieldName> <InstructingPartyValue><![CDATA[<UNIT><2000>]]></ InstructingPartyValue> <ExecutingBrokerValue><![CDATA[<UNIT><2000>]]></ ExecutingBrokerValue> <FieldLevelMatchStatus>MACH</FieldLevelMatchStatus> <FieldLevelL2MatchRule>QuantityExact</FieldLevelL2MatchRule> </FieldComparisons> <FieldComparisons> <MessageFieldName>TradeAmount</MessageFieldName> <InstructingPartyValue><![CDATA[<><CAD><2000,00>]]></ InstructingPartyValue> <ExecutingBrokerValue><![CDATA[<><CAD><2000,00>]]></ ExecutingBrokerValue> <FieldLevelMatchStatus>MACH</FieldLevelMatchStatus> <FieldLevelL2MatchRule>MoneyExact</FieldLevelL2MatchRule> </FieldComparisons> </FieldComparisonResponseBody> </FieldComparisonResponse> </CTM_Message> Omgeo Central Trade Manager June 10,

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28 Omgeo. All together now. Americas Omgeo LLC 22 Thomson Place Boston, MA Tel: OMGEO ( ) Asia Omgeo Pte Ltd 18 Science Park Drive Singapore [email protected] Tel: Europe Omgeo Ltd Aldgate House 33 Aldgate High Street London EC3N 1DL [email protected] Tel: Japan Omgeo K.K. Akasaka Park Building Akasaka Minato-Ku Tokyo, Japan [email protected] Tel: Copyright 2013 Omgeo LLC. All rights reserved. Omgeo and the Omgeo logo are registered service marks of Omgeo LLC. All names of Omgeo services appearing herein are either registered service marks or service marks of Omgeo LLC in the United States and elsewhere. The U.S. Securities and Exchange Commission regulates several Omgeo services. For more information, visit Omgeo has approved this document for public distribution. The examples, pictures, and data are for illustrative purposes only. This document contains no actual trade data.