Comprehensive Risk Management and Execution Infrastructure Tools
Market structure failures in the not too distant past, like the 2010 “flash crash”, have heightened regulators’ interest in pre-trade risk controls and have clearly created a requirement for market participants to bolster their risk management capabilities. However, managing risk across the entire trading landscape can present several challenges including both technological and administrative demands of modern trading combined with the speed and volatility of global markets – which can put stress on profitability, credit allocation to clients and compliance at firms of all sizes.
Nasdaq’s TradeGuard solution provides broker-dealers, hedge funds, prime brokers and clearing firms with comprehensive risk management and execution infrastructure tools to help minimize risks in increasingly regulated, latency-sensitive, high-volume and global trading environments. TradeGuard is a proven solution that enables firms to monitor and manage their aggregate risk exposure across markets, asset classes, regions and accounts in real-time through flexible pre-, at- and post-trade controls. The solution provides coverage for:
Systems & Controls
TradeGuard’s open architecture allows for different risk checks in different tiers to meet specific business requirements and all relevant use cases, with pre- and at-trade risk checks residing natively within the matching engine that typically introduce less that 2* microseconds in latency.
- On-trade risk infrastructure optionally ties into real-time margining engine for improved capital efficiency
- Pre-trade risk connects into post-trade for additional real time margin checks
- Wide variety of risk checks available for margin checks, daily quantity checks and “fat finger” checks
- Available “hot” redundancy ensures no “failover” is required if one instance experiences an issue
In addition to the multitude of risk checks available, TradeGuard encompasses capabilities for regulatory reporting surrounding initiatives such as MiFID II and global regulatory trends such as position limit reporting. Additionally, the solution can provide reports for:
- Order Ticket
- Trade Reconciliations
- Risk Events
- Trader Audit
Nasdaq's Position Limits monitoring solution enables firms to control their exchange limits as well as position limits associated with upcoming CFTC and MiFID II regulations. Limits are monitored in real-time as trades are executed to enable firms to optimize their limit utilization while avoiding the risks of incurring regulatory violations. Nasdaq's Position Limits monitoring solution is a secure, fully hosted service that leverages SMARTS Risk Manager's existing real-time connectivity engine so firms can have centralized monitoring of every position across the firm in every market.
- Sponsored Access: Designed to ensure end-clients adhere to sponsoring brokers limits
- Exchange Guards: Designed to safeguard market health by ensuring market participants meet exchange-set limits
The solution’s flexible risk engine is designed to control credit consumption and margin availability, with the ability to clear trading positions to protect CCPs and GCMs. It provides clearing brokers with global visibility across all of the entities they clear, via an easy-to-use dashboard that monitors overall intraday market exposure across client accounts, asset classes, markets, systems and geographies in real-time.