Risk Management

Mitigate Risk While Enabling Counterparties To Trade On Margin

Broadridge FXL’s Risk module is a real-time, cross asset solution for high-volume margin trading organizations looking to mitigate risk while enabling their counterparties to trade on margin. Broadridge supports multiple types of limits and margin on multiple trading products.

Our module can configured as a stand-alone solution or integrated with Broadridge FXL’s position management and back-office solutions.

Limit Monitoring Highlights:

  • Real-time risk assessment enables organizations to effectively allocate a greater percentage of capital towards deal flow
  • Real-time limit monitoring provides the assessment of the source and nature of credit risk allowing management to make informed decisions in active market situations
  • Real-time alerts and work queues on limit breeches enable credit managers to seek adequate remedies to alleviate at-risk situations
  • Credit management through ad hoc exposure adjustment allows for temporary amendments to credit exposure
  • Flexible and time sensitive pre-trade modeling enables traders to competitively capture business in time sensitive situations by knowing credit capacity at the moment a trade opportunity arises
  • NPV, delta risk, futures equivalent and OTC Greeks are standard items that can be displayed within the blotters
  • Flexible configuration options allows for the modification of credit exposure methodology and the addition of new types of limits without coding
  • Robust audit and logging capabilities support regulatory requirements and easy tracking of all transaction history

Margin Processing Highlights:

  • Real-time pre-trade checks against the current value of a customer’s collateral and existing net open position enables informative decision-making
  • A comprehensive configurable set of limit exposure and net open position calculations accommodate flexible definitions of exposure/net open position (NOP)
  • Real-time alert generation allows for actionable mitigation of risk exposure, viewing current limits and exposures as well as their status when an alert is created. If market rates move against the customer, visual alerts are displayed in real-time blotters, even when no new trades have been entered
  • Configuration options for a ‘hard’ stop requiring secondary authorization to process a trade or a ‘soft’ stop where a warning message is displayed to the trader when one or more limits are broken on a transaction
  • Exposures are easily managed by a specific value date, or by a range of dates
  • Counterparty risk can be viewed for an individual customer, or structured as a multi-level parent child hierarchy of customers
  • A customizable framework from which a number of reports can be generated displaying the margin status of all customers as well as net equity, buying power and other user-defined requirements

VaR Highlights:

Broadridge uses a variance-covariance metric to estimate VaR supported by FINCAD Analytics. Assuming that returns are normally distributed, the method estimates two factors – an expected (or average) return and a standard deviation – to plot a normal distribution curve.


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