DealHub’s new ‘Back to Front’ Solution Reduces Risk

Sep 29, 2009

Option Computers Ltd (OCL), the leading global provider of STP and connectivity feed handling software to the FX markets, has extended their portfolio of products to include DealHub/Conductor, a routing service to settlement and central counterparty clearing services. This is part of the visionary Back to Front approach which allows many back-offices services to be performed immediately upon deal capture.

DealHub/Conductor reduces the volume of trades which are processed at the back-office, by pre-matching and aggregating trades where possible, and sending the aggregated trade to the desired settlement venue. Trades can be aggregated by counterparty, ccy pair and value date.

DealHub/Conductor enables key events to occur earlier in the trade flow: a term DealHub refers to as Back to Front processing. This allows for trades to be matched sooner, errors to be spotted and corrected earlier in the trade flow, credit risk to be identified immediately, and the back office to be informed of potential issues earlier in the trade lifecycle. DealHub’s solution includes an MQ API for integration to the new CLS/ICAP joint venture trade aggregation services along with an associated reconciliation module.

‘DealHub/Conductor addresses the market's requirement to reduce risk. Once you have matched pairs of trades you should be able to settle in the venue of your choice. Matching and aggregation should be fully independent of the settlement venue. By moving the integration point back to the front office, the Dealhub Conductor solution ensures that aggregation occurs earlier in the trade flow thereby protecting the risk systems. ’ says Patrick Philpott, president of Option Computers.

This pre-risk integration also allows DealHub to aggregate PB trades within the risk system, reducing the load placed on position and risk systems by large spikes in PB flows.

Says Philpott ‘As the settlement and clearing services landscape evolves, OCL expects multiple central counterparties (CCP’s) to offer settlement and clearing services to the OTC marketplace. This flexible solution makes it possible for the bank to send matched and/or aggregated trades to any CCP or settlement company. Our job is to provide an open interface; we provide the tools to easily interface to CCP’s and any settlement venue’.

DealHub provides the widest range of STP solutions to trading and back office operations. DealHub is used globally by several of the top FX dealing banks in the world. External sources supported by DealHub include interbank platforms, leading bank FX trading offerings, exchanges, algorithmic trading platforms and multi-bank portals.

Article Type: 

Share this!