Traiana has expanded its Harmony CreditLink initiative, originally launched in June 2011 for over-the-counter (OTC) foreign exchange (FX) trading, with the addition of real-time limit monitoring and a ‘killswitch’ capability for exchange traded derivatives (ETDs).
The vendor said that the increase in high frequency and algorithmic trading in the exchange traded market has made the provision of adequate controls and real-time risk capability critically important to clearing brokers, high frequency traders and firms providing direct market access. Regulators too are increasingly demanding better monitoring capabilities on the financial markets.
With the enhanced CreditLink solution, futures commission merchants (FCMs) can enforce trading limits globally and monitor for compliance with limits in real-time. If limits are breached, trading can be halted quickly. Traiana added that two of the world’s largest derivatives exchanges, CME and NYSE Liffe, are the first to be connected with further exchanges in the on-boarding process.
CreditLink has already proved effective, claims Traiana, as it now monitors risk in real-time across foreign exchange (FX) and exchange traded derivatives, the integrated killswitch has been activated multiple times in response to technical failures, distressed firms and limit breaches, resulting in reduced risk of losses by customers, counterparties and their clearing firms. The ability to call trades to a halt – the killswitch – is also an important function after the flash crash downed markets in previous years
“Following the successful introduction of a killswitch in the FX market it was a natural next step to extend it to the exchange traded derivatives market, specifically for DMA and sponsored access trading,” said Andrew Coyne, chief executive officer (CEO), Traiana. “With CME Group and NYSE Liffe on board, this initiative is poised to reduce risk and strengthen the resilience of exchange traded markets.”
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