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Nasdaq Announces TradeGuard, New Risk Management Solutions

Nasdaq expanded its Access Services suite with an upgrade of the acquired risk management platform, FTEN.

This morning Nasdaq announced TradeGuard, a product suite of risk management tools that will expand its Access Service business. TradeGuard is an upgrade of the enterprise risk management platform formally known as FTEN before its acquisition by Nasdaq in late 2010.

"We can now offer a standard, off-the-shelf solution or more custom, integrated solutions," explains Stacie Swanstrom, senior VP of Access Services at Nasdaq OMX in an interview. "Previously with FTEN, we tended to more custom integrated solutions, but firms already have different tools in place in different areas. The feedback we were hearing was that firms need more flexibility to use a mix of our various standard products, so we now have the ability to provide whatever solution they need with scalability and cost efficiency."

The TradeGuard suite offers several risk products including a new trade control gateway software, a risk measuring tool, and supplemental risk monitoring tools for new markets and asset classes.

Featured solutions include, RiskWay, an enhanced trade control gateway for equities. "We heard loud and clear that they needed faster gateways," says Swanstrom. Latency reduction from the old gateway (VX) to RiskWay went from about 400 microseconds to 9 microseconds, or a 98% reduction in latency.

TradeGuard also features RiskWrapper to help firms "capture the network" by measuring the risk at the network level. Firms already use network capture devices to measure latency, she explains, but they can be designed to also report risk levels. "These are large issues for firms who have accidentally introduced bad algorithms that went around risk systems and caused damage."

Also announced, TradeGuard has the ability to monitor positions across equities, options, and is close to incorporating futures, and working on fixed income.

Broker dealers have made it clear they need the ability to quickly take their capital and leverage it in best way possible, she explains. Running multiple risk engines in separate areas does not give compliance officers a full view of what's happening in real-time across assets and the globe.

The broker dealer community has expressed their risk needs were evolving over the past two years, concludes Swanstrom. "We knew we needed to evolve with those clients’ needs." Becca Lipman is Senior Editor for Wall Street & Technology. She writes in-depth news articles with a focus on big data and compliance in the capital markets. She regularly meets with information technology leaders and innovators and writes about cloud computing, datacenters, ... View Full Bio

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IvySchmerken
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IvySchmerken,
User Rank: Author
1/29/2014 | 10:09:10 PM
re: Nasdaq Announces TradeGuard, New Risk Management Solutions
FTEN was a key acquisition for Nasdaq OMX in 2010 just around the time SEC's Market Access requiring pre-trade credit checks, put the onus on brokers to crack down on risky trading by their sponsored access clients. But as you point out, brokers' risk needs have changed in those 3+years. Nasdaq OMX has revamped FTEN and rebranded it as TradeGuard. which is much faster (from 400 to 9 microseconds). Risk Wrapper sounds like a cool feature - being able to measure risk at the network level, pulling back a bad algo before it hits the exchange gateway show how technology can safeguard high-speed markets.
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