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 optionally reported to CAT but must be properly identified as such by populating the allocationType field with one of the allowable values indicating an optionally reported allocation as defined in the Industry Member Technical Specifications (for example, ‘FLP’ (Correspondent Flip)). In addition, effective July 11, 2022, the accountHolderType field must be populated on allocation events. When optionally reporting an allocation to an account owned or controlled by a broker-dealer:

• If the specific account holder type is recorded in the Industry Member’s books and records, it must choose the applicable allowable value. For example, if an Industry Member is voluntarily reporting a CMTA and the account involved is recorded in the Industry Member’s books and records as an institutional account as defined in FINRA Rule 4512(c), it must use the accountHolderType ‘A’ (Institutional Customer – An institutional account as defined in FINRA Rule 4512(c))
• If the specific account holder type is not recorded in the Industry Member’s books and records, it must populate the accountHolderType field with ‘P’ (Other Proprietary).

Note that average price accounts designated exclusively for a specific customer (not a broker-dealer) are always considered customer accounts.

Example 1 (Allocation report NOT required but may be voluntarily reported)

A clearing firm books shares into an average price account that is owned or controlled by an Introducing Broker (IB) before the IB provides allocation instructions to the final customer accounts. When optionally reporting allocations to an account that is owned/controlled by an introducing broker/correspondent, it is acceptable for the clearing firm to report the accountHolderType from the perspective of the IB/correspondent. In this example, since the clearing firm knows it is allocating shares to an average price account that is owned/controlled by its IB, the clearing firm must populate the accountHolderType field with ‘V’ (Firm agency average price account) indicating that the average price account is owned/controlled by the IB.

Example 2 (Allocation report NOT required but may be voluntarily reported)

An executing self-clearing firm receives an order from another broker-dealer. The order is executed, and the shares are booked into an account that is owned or controlled by the other broker-dealer before allocation to the final customer accounts.