Page Metadata

PRE-TRADE RISK MANAGEMENT (PRM) - NORDIC

In today’s marketplaces there is an increased focus on risk management and specifically on pre-trade risk management in relation to new market access models such as Sponsored Access and DMA. As high frequency- and algo trading are replacing manual processes the need for automated control systems to reduce risk is increasing. Human errors, fat fingers and miscalculated algos can cost businesses millions of dollars and cause severe damages. At the same time speed of response and latency are getting more and more important, especially when algorithmic and program trading methodologies form the base of customers business. 

Benefits 

  • Ensure Market Integrity 
  • Minimal latency impact with a mix of pre- and post-trade controls 
  • Compliance with ESMA Guidelines 
  • Focus on highly automated trading flows
  • Facilitates Sponsored Access and low-latency DMA

PRE-TRADE RISK MANAGEMENT - GENIUM INET

As the leader in trading and data technology for the financial industry, Nasdaq has developed a Pre-Trade Risk Management service that provides customers of its Nordic Equity Derivatives and Commodities marketplaces a Pre-Trade Risk Management solution that virtually adds no latency. Nasdaq is pleased to announce a cost efficient way to take control and reduce risk - Genium INET Pre Trade Risk Management system (PRM). PRM is a solution that ensures market integrity, is compliant with the ESMA Guidelines and focuses on highly automated trading flows. The functionality has minimal latency impact with a mix of pre- and post-trade controls and it also facilitates sponsored access, GCM/NCM relationship and low-latency DMA.

PRM Protection in Brief

Fat Finger Price Check
This functionality (Order Price Limit) is separate from PRM and is set market wide for all participants by the exchange. Fat Finger Price Checks compares price instructions on incoming orders against a reference price. If the order deviate more than an order book configured parameter, the order will be rejected before it can execute.

Max Order Quantity Check
Max Order Quantity Checks provide users the ability to check order volume against a pre-set value.

Daily Accumulated Quantity Checks
Accumulates quantity counters throughout the current trading day. Once volume hits the maximum configured value, new orders sent will be rejected. Multiple accumulation checks are available.

Maximum Order Rate Per Second Checks
Set limits on allowed orders/sec rates on a per Pre-Trade Limits Group basis.

Disconnect Safeguard
If the sponsor loses its connection, associated sponsored clients are blocked in the same way as if a limit is breached.  

PRM E-Mail Notifications
PRM sends notifications when limits are breached or warning levels are reached. 

PRM Administration Interface
An easy to use PRM Administration interface, is provided, that provides direct control of your PRM account configuration, including the ability to perform emergency actions.
Scroll up