Allowlist amendments need a rule for existing positions

Removing an instrument from an entry allowlist needs a separate rule for outstanding positions. We would ask the mandate to distinguish opening exposure, increasing exposure and reducing existing exposure. An instrument can become ineligible for new entries while still requiring ongoing management.

An illustrative account holds $4,000 of ETH when the owner narrows the entry allowlist to BTC. A proposal to add another $1,000 of ETH violates the new entry rule. A proposal to reduce the ETH holding by $1,000 may remain admissible under an explicit management exception. Automatically selling the entire holding would require a different instruction.

State what removal authorizes

The amendment record should include the removed instrument’s canonical identifier and a portfolio snapshot. Symbol strings can collide across instruments, so matching only display text is insufficient. The record then states whether the policy permits hold-and-manage, gradual reduction or a specifically authorized closure procedure.

We would make the management exception narrow. It references an existing position, restricts actions to a verified reduction and ends when that position is flat. A later fresh ETH entry cannot inherit the exception merely because the account once held ETH. An attempted direction reversal must be split conceptually into closure and a new opening, with the new opening evaluated against the allowlist.

Our proposed replay includes a partial reduction, full reduction and a quantity that would cross through zero. Expected behavior for the last case is rejection or a normalized close limited to the existing amount, according to the chosen contract. Either behavior must be disclosed before testing. The fixture also covers a position reported as absent and a stale position snapshot.

The owner should see the transition rule next to the allowlist diff. “Remove ETH” is otherwise ambiguous between excluding opportunities and ordering liquidation. A candidate that silently chooses one response creates economic discretion that the owner never reviewed.

Once the holding reaches zero, retain a record that the exception ended. Future turns can then distinguish a permitted historical exit from an inadmissible fresh entry. The procedure produces an inspectable position-management transition, with market performance evaluated separately.

Our mandate compiler provides the wider instruction-to-action framework for this position-management exception. The published controls research supplies its historical background. DXAP publicly describes the corresponding separation between model proposals and external policy checks.