Pre-trade Risk Management for INET

a low-latency risk solution for trading and sponsored access clients

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Complete MIFID II proof pre-trade risk protection with order level control of trading.

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Nasdaq Nordic’s Pre-trade Risk Management (PRM) is designed to prevent loss and damage caused by human errors, fat fingers and miscalculated algos. PRM validates orders entered via OUCH and FIX and can be used both for your firms own trading or for your sponsored access customers.

PRM was developed with highly automated trading flows in focus and adds no latency to order execution. Compliant with ESMA guidelines.

Fat Finger Checks

Fat finger checks catches order entry errors by checking the price against current last sale.

Fat Finger Price Check
Compares price instructions on incoming aggressive and passive orders against the current last sale. If the order deviates more than an order book configured parameter (%), the order will be rejected.

Fat Finger Price Check during Auctions
Compare the price of an incoming order against the closing price of the previous day during opening auctions. During other auctions the comparison is made against the current last sale. If the order deviates more than a given threshold (%), the order will be rejected.

Max Limits

Max limits on order values, order quantities and order rates create a safety net, customized through the administrator settings.

Max Quantity Check
Provides users an ability to check order volume against a pre-set value.

Max Value Check
Controls the maximum order value allowed on a per order basis.

Max Accumulated Value Checks
Accumulates the order value throughout the current trading day. Once volume hits the maximum configured value, new orders will be rejected. Multiple accumulation checks are available.

Maximum Orders Rate
Limits the number of allowed orders per second on a per port or symbol basis.

Restrictions & Safeguards

Prevent trading on selected symbols or market segments, detect unusual repeated order generation patterns, restrict trading during auctions or access a kill switch for mass cancellation or orders.

Restricted Symbol and Market Segment List Checks
Prevent trading on certain symbols or market segments. Any orders on symbols that are on the restricted list will be rejected. FTP bulk upload of restricted symbols available

Market Order Restriction during Auctions
Restrict accounts that can place market orders during auctions.

Restricted Symbol and Market Segment List Checks
Prevent trading on certain symbols or market segments. Any orders on symbols that are on the restricted list will be rejected.

Repeated Order Generation Check
Detects unusual repeated order generation patterns and generates e-mail notifications.

Blow-Through Protection
Protects from triggering Nordic Volatility Guards.

Kill Switch for Mass Cancellation of Orders (Administrator)
Cancels all current orders.

FIX Drop On-Disconnect Safeguard
Cancels all open orders and prevents order entry in case of disconnect.

Administration interface

Access your PRM administration through the Nordic Workstation to manage both global settings and restrictions on individual accounts.

Use the pre-trade risk management administration to:

  • View and amend the PRM account limits, per currency, for all checks.
  • Access emergency block/unblock of order entry for a PRM account.
  • Cancel all open orders for a PRM account.
  • Unlock a PRM account that has breached the limit for an accumulated value on a currency.
  • Manage the list of restricted symbols per PRM Account.
  • Update PRM limits intraday or from the next trading day.

Key Benefits with PRM

Low Latency

PRM adds no latency to order execution for high frequency trading and algo trading.

Facilitates Sponsored Access

Maintain control over trade flow for clients with sponsored access to trading.

Quick & Easy Implementation

PRM is a plug-n-play solution that is easy to implement. Set up your risk management from the Nordic Workstation and you are ready to go!

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