Trade Allocation Fairness Review Worksheet

Inspection template for reviewing block trade allocations across client accounts to verify equitable distribution, detect preferential treatment, and support fiduciary duty and fair dealing obligations.

Review Scope and Trade Identification

• Review period and sample set are documented
  Record the date range, number of block trades reviewed, and sampling method used.
• Trade blotter, allocation blotter, and order records are available
  Verify source records are complete enough to trace each block trade from execution to final allocation.
• Eligible client accounts for each block trade are identified
  Confirm the universe of eligible accounts was defined before allocation decisions were made.
• Allocation policy or SOP reference is documented
  Enter the policy, procedure, or desk guidance governing trade allocation.

Allocation Method and Proportionality

• Allocation method matches the approved policy
  Verify the method used (for example, pro rata, model-based, or rotation-based) matches the approved allocation rule for the strategy.
• Allocations were completed using the same methodology for all eligible accounts
  Confirm no eligible account received a different treatment without a documented, approved exception.
• Allocation percentages are consistent with order size and account eligibility
  Check whether the final allocation percentages reasonably align with the intended methodology and account constraints.
• Rounding differences are immaterial and consistently applied
  Verify any rounding or minimum-lot adjustments were applied consistently and did not favor specific accounts.
• Late or manual allocation changes are documented and approved
  Confirm any post-trade changes were authorized, time-stamped, and supported by a valid business reason.

Fair Dealing and Preferential Treatment Checks

• No client account received a consistently favorable allocation pattern
  Review for repeated over-allocation, better fills, or systematic preference to any account or related group of accounts.
• Pre-trade order entry time did not influence allocation unfairly
  Confirm that any time priority, order aggregation, or internal queueing rules were applied consistently and in line with policy.
• Restricted, proprietary, or employee accounts were not favored over client accounts
  Verify client accounts were not disadvantaged by allocations to proprietary, house, or affiliated accounts.
• Any exceptions to standard allocation were independently reviewed
  Confirm exceptions were reviewed by compliance or another independent reviewer and supported by documented rationale.

Documentation, Exceptions, and Corrective Actions

• Exceptions and non-conformances are logged with trade identifiers
  Record each deficiency with the trade date, security, account(s) affected, and nature of the allocation issue.
• Root cause analysis completed for any failed allocation review item
  Document whether the issue was caused by process error, system logic, manual override, or policy gap.
• Corrective action owner and due date are assigned
  Enter the responsible person or team and the target completion date for remediation.
• Follow-up monitoring is scheduled for repeat issues
  Confirm a follow-up review or enhanced sampling plan is in place when repeated deficiencies are identified.

Review Sign-Off

• Overall review result
  Select the final outcome of the fairness review.
• Inspector comments
  Summarize key findings, exceptions, and any material concerns about fairness or preferential treatment.
• Inspector signature
  Signature of the reviewer completing the inspection.