Allocation to investors in dealer instruction

A dealer/instrument instruction can contain amount instructions for more than one client.

When we confirmed an instrument instruction with more than one client, we calculated the amount of units to allocate to each client.

The allocation can be done in 2 ways:

A. Based on units received

Here we work out proportionately what units must be allocated to each client.
Proportion: The amount instructed by the client / The sum of the amounts for all clients.

Due to rounding and clients with large amounts combined with clients with small amounts in the same dealer instruction, the price at which the units are allocated to the clients can differ slightly.

B. Based on Price received

Here we take the amount instructed by the client divided by the transaction price to allocate units.

The client will therefore always receive the transaction price as the price of the transaction.

Differences between deal units captured and units allocated will be written to the working portfolio as a rounding error.

Finworks now allocate on price received

See Allocation for examples of the difference between unit and price allocation.

Last Updated on 6 years ago by Antoinette Van Meyeren