Our solution for pre-trade risk management: CAS / Pre Trade Monitor.
As a result of the recent SEC ruling, (specifically 15c3-5), Softek is completing work to connect the post trade credit service to a real-time pre-trade hardware-accelerated solution for enforcing credit limits and blocking erroneous orders sent by high-frequency and program traders.
Sitting between the customer trading engine and the liquidity source (exchange), this Risk Lease concept is illustrated in the attached diagram and allows the complex margin lending policies developed by Softek to be used to check the available credit for the mid and high frequency trading clients in a low latency environment. It fully addresses the new DMA requirements outlined by 15c3-5.
Some highlights:
• Position keeping, including global monitoring of filtered positions in real time
• Pre-trade risk management, with limitations and alerts on traders and clients
• Order filtering, to prevent risky orders from reaching the markets
• Optimal performance (high throughput, very low filtering latency)
• It supports multiple asset classes and all currencies.
The following are the specific Compliance/Risk Controls that are also addressed with the Softek Solution:
- Clearly Erroneous Order Check (Limit Orders)
- Clearly Erroneous Order Check (Market Orders)
- ISO Order Handling
- MOC/LOC
- Order Marking
- Max Order Size (Shares/Contracts)
- Max Position (Shares/Contracts)
- Max Order Notional (Dollar Amount)
- Max Account Notional (Dollar Amount)