Trade Lifecycle Management
With products and regulations constantly evolving, trade lifecycle management is undergoing rapid change. Since January 2018, European firms have had more regulatory requirements than ever before, and the ability to quickly reconstruct trade events has become essential for everything from regulatory compliance to risk management.
The steps involved in a trade life cycle
There are a number of different touchpoints in a trade life cycle. A trade life cycle is comprised of the following stages:
- The buy order: the investor informs the firm of the product they’d like to buy, and at what price
- The front office action: the investor’s order is received by the front office traders at the firm. The order is then passed to risk management experts in the firm’s middle office.
- Risk management: the risk management team will check the order and estimate the level of risk – essentially demonstrating whether it’s safe to complete the order.
- The Stock Exchange: once the order has been accepted and validated by the risk management team, it will be sent to the Stock Exchange.
- Matching the orders: the exchange looks for a match between a buy order and a sell order.
- Trade completed: once a match has been found, the trade is completed – moving the process quickly into post-trade territory. The firm’s front office team inform the client of the trade.
- Confirmation: the broker on each side of the trade confirm that their client agrees with the conditions (how much it’s been traded for, the settlement date etc).
- The clearing house will make the necessary calculations to determine what is needed from the buy side and the sell side and when.
- Settlement: the back office staff will ensure the payments are made on time, documented and reported correctly, therefore completing the trade life cycle.
Understanding trade life cycle management
The trade life cycle is designed to mitigate risk and create an efficient and resilient environment for investment. As efforts are made to strengthen its resilience and encourage greater transparency across the market, it can be hard for firms to keep up to date with the latest technology, innovation and regulation.
Many firms struggle to manually process increasingly complex financial products across a myriad of fragmented systems. The PATH system is designed to make every step of the trade life cycle process much easier.
PATH is highly scalable and easily integrated into the existing back and middle office environments of banks, brokers and asset managers.
What PATH means for your trade life cycle management
The PATH platform delivers:
- Enhanced operational controls, by consolidating fragmented post-trade multi-asset infrastructures into one consolidated platform
- A modern and efficient replacement for legacy systems and paper-based processes. PATH provides a single STP platform for improved return on investment (ROI)
- A highly scalable solution where increased trade volumes have minimal impact on operations and reduced operational costs
- Total trade ownership, delivering exceptions to users through the inbuilt exception handler
- Reduced operational risk, through an automated workflow-based solution. PATH provides a transparent and audited view across the full trade life cycle.
The PATH workflow model is a predefined solution, but it can be changed to give you greater flexibility with your trade life cycle management. PATH can be modified to reflect the client’s business needs and access their systems. Models are available for:
- Foreign Exchange
- Money Market
- Client Valuations
- Static Data Aggregation and Dissemination