DealHub FX Trade Aggregation

23 August 2007

Option Computers Ltd’s (“OCL”) DealHub solution has been delivering low latency, high volume, bank critical applications for the last 10 years. DealHub software is used at over 70 sites globally within a substantial number of Tier 1 banks. DealHub is uniquely positioned within these organisations to see the complete deal flow from all inter-bank, e commerce and prime brokerage client venues, and our ability to communicate with risk management, trading and settlement systems offers the widest possible range of real time connectivity and visibility of trading operations as they occur.

Since Q2 of 2007 OCL has been working with a number of Tier 1 banks, both existing and non – DealHub clients, to produce a solution for FX trade matching and aggregation to solve volume capacity issues within the industry. A series of Roundtable meetings have been held followed by compression testing of bank data for two days trading from May 2007. This has produced results for netting to pairs of trades and single trades, with extremely high compression rates where on one example day for one branch in excess of 13,000 trades were compressed down to just 300 net trades.

OCL has recently established a pilot scheme which is now running at two banks for both unilateral internal netting between bank branches and bi-lateral netting between counterparties. The DealHub solution has been implemented as a real-time matching and aggregation platform that demonstrates the true low latency, fully functional, fully automated aspects of our offering; going far beyond the more traditional web page GUI centric approach.

Banks involved in the pilot are currently utilising the DealHub Matching and Aggregation Engines and GUI applications to review real-time daily summary positions, unmatched and matched trades, component and net trades, investigation queues and exception screens. Users have also provided feedback on the various real-time workflow options that make this solution unique when compared to more traditional static display systems.

Live parallel testing on inter-branch netting is providing very good results, including real-time testing during the two recent very high volume days on Thursday 16th and Friday 17th August; the pilot is delivering proven compression levels in excess of 95%.
Connectivity between the banks will be provided by the secure Radianz network which is the world’s largest shared market infrastructure designed specifically for the financial services market.

“OCL has a proven track record of delivering extremely reliable high throughput technical integrations to all the major FX trading venues, and our clients have been able to cope with the recent spikes in ticket volumes using our ultra-fast feed handler software and through the provision of queue prioritization within our quality of service (QoS) layer. We are fully aware of the issues that the new paradigm for dealing with volume throughput raises, and we continue to provide ever faster software to allow banks to plan for even larger volumes. We are also aware of the possibility of a CLS solution to facilitate the issue of trade aggregation within existing member rules, and are happy to work with both CLS and the banks to provide suitable technology” said Peter Kriskinans, MD of OCL.

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