As the leading provider of trading and data technology for the financial industry, NASDAQ OMX is pleased to announce the launch of the Pre-Trade Risk Management (PRM) service for Commodities.
Genium INET PRM is developed by FTEN, a NASDAQ OMX company and a world leading provider of pre-trade and at-trade risk management technology. PRM facilitates real-time pre-trade protection to mitigate erroneous orders and transactions.
Earlier this year, NASDAQ OMX announced the launch of Genium INET PRM to its Nordic Equity derivatives customers. On June 10, the Pre-Trade Risk Management (PRM) service was made available for Commodities members. In today’s marketplaces there is an increased focus on risk management and specifically on pre-trade risk management.
The development of electronic trading of derivative instruments has generated many benefits, lowered costs, wider and greater participation in markets, faster market access and greater liquidity but may have also created new risks. Human errors, fat fingers and miscalculated algos can cost millions of dollars and cause severe reputational damages. PRM is a cost efficient way to take control and reduce risk, ensuring market integrity and providing the members with a tool for complying with ESMA Guidelines (systems and controls in an automated trading environment for trading platforms, investment firms and competent authorities).
“The purpose of effective PRM is to preserve the cost and liquidity benefits of electronic trading, while providing an efficient tool for mitigating the possible risks,” said Bjørn Sibbern, Senior Vice President and Head of NASDAQ OMX Commodities.
The Pre-Trade Risk Management (PRM) features in Genium INET are available for members using NASDAQ OMX’s proprietary trading platforms, software provided by Independent Software Vendors or in-house developed software. PRM features an administration interface that provides the member with a complete and continuous overview of trading activities and the controls needed to act immediately. PRM has been tailored specifically for General Clearing Members’ needs; however, the service meets the needs for improving pre-trade protection for any member.
As markets around the world respond to ever increasing globalization and fragmentation, regulators worldwide continue to emphasize the importance and interdependence of risk management and surveillance. The roles and responsibilities of pre-trade risk management, surveillance and compliance can no longer be considered in isolation, and NASDAQ OMX has proven to be a world leader in this respect. With the SMARTS Broker (Surveillance solution for broker dealers) and PRM risk-compliance offering, NASDAQ OMX is leading the way in helping our customers respond to the ever changing regulatory landscape.