Automation of monitoring and reporting crucial trader limit breaches

The Challenge

Monitoring internal limits violations for all derivatives and commodity trading activity becomes challenging once trading activities are on the rise. Timely reports are particularly important for businesses to function smoothly. Monitoring must be done for a broad array of limits – like position, value, term, duration, portfolio, etc. At most, a manual report can be available for the previous day’s trades and not intraday.

Moreover, a mechanism needs to be in a place where the violations done by traders have to be notified to traders and their managers to whom they report. Capturing trades, filtering, and identifying violations are difficult, eventually resulting in a lapse.

There needs to be a solution that can:

  • Consolidate data from respective sources efficiently
  • Centralized management of trader limits and audit of changes
  • The report should be available before the start of the next business day
  • The report should be available intraday multiple times
  • Should be able to detect various limits like position, value, term, duration, portfolio, etc.
  • Report violations in a timely fashion with appropriate notifications
  • Reduce operational risk and improve resource utilization

The Solution

ePic was considered the best fit for this situation and was finalized to be deployed due to its ability to rapidly execute the solution with a proven implementation experience. It can easily connect to upstream and downstream data sources and model their business processes in the platform. Trades data is fetched from the appropriate source, breach conditions are checked, and a violation report is generated before the start of the business day.

With a defined mechanism in place, the firm was able to address multiple violations in one go:

Outcomes and Benefits