OTC Derivatives Portal

A large UK bank required a solution to advise OTC derivative traders if they could trade a derivative with a counterparty

The Challenges

• The user interface must be quick and easy-to-use in a busy trading environment
• Advice should be clear and specific. Can I Trade? How Do I Trade?
• The solution should be multi-asset, supporting Rates, Credit, FX, Commodity and Equity derivatives
• Consideration needs to be paid to the introduction of new regulations as they are introduced by different authorities, and the impact they could have on the solution
• Advice needs to be tailored according to the bank’s legal entity and counterparty locations
• Some client data may not be up to the quality necessary to provide good advice

The Brickendon Solution

• To engage in usability workshops with sales traders to design a user interface that they were happy to use on the trading floor
• To design a framework for trading rules that would support initial requirements, as well as allowing the addition of new rules in the future
• To work with business experts to implement trading rules that would advise on compliance, business conduct, clearing, execution, and timely confirmations, in accordance with CFTC and EMIR regulations
• To utilise test-driven development (TDD) to facilitate the generation of correct business logic
• To implement a comprehensive rule testing framework to verify correctness and track regression
• To develop data access logic to read from different sources and provide a simple data model to the rules engine
• To use data quality validation rules to highlight if data is missing for a counterparty

Client Benefits

• Sales traders are able to quickly determine if they can do a trade with a counterparty. The number of non-compliant trades should be very low
• The client is able to demonstrate to regulatory bodies that they have appropriate procedures and controls in place to ensure compliant trading
• Data-mining of advice could provide suggestions for making more counterparties and trades compliant, in turn generating more business