ADP back-office outsourcing clients will have access to an integrated risk tool for margin account monitoring
ADP Brokerage Services Group has teamed up with Advanced Trading Solutions to offer a new real-time risk management tool to its customers. Under the alliance, ATS's RiskMon tool will be available to ADP back-office outsourcing clients as an application service provider option.
Charlie Marchesani, senior vice president of product development at ADP Brokerage Processing Services, says that the idea originated within the vendor's client steering committee, a consortium made up of operations heads and other representatives from end-user firms. "With the volatility in the marketplace, margin risk is something customers need to protect themselves against," says Marchesani. The RiskMon tool monitors designated margin accounts and e-mails users with updates throughout the day on high-risk accounts.
The RiskMon tools will be integrated with ADP BPS's back-office platform and can be accessed through an intranet interface for real-time alerts and "what if" analysis. In other words, if users are trading during the day, the updates are fed directly from the ADP BPS back-office platform into the RiskMon system for real-time risk views. In addition, the tool interfaces with market data supplied by Reuters, enabling users to see the real-time impact of pricing changes.
Marchesani explains that the integration work took place at both the operational and the product level. "We worked with the folks at ATS to put their code onto our mainframe environment and then we had to do the back-office integration relative to the data being imported into the tool as well as the market data integration," he adds.
The RiskMon tool will be a separate application running on the user desktop, but will be integrated with the back-office data from ADP. Initially, users will have to download a software piece on their desktop, but in six to nine months the tool will be available purely via the intranet connection with no download. RiskMon tools and reports include an account review page, equity losers and on-the-brink equity losers reports, what if scenarios, security summary screens, account detail screens and end-of-day recap reports.
ADP BPS is currently in conversations with two users as potential beta clients on the system and expects the RiskMon tool to be generally available in March. The pricing of the RiskMon tool will be at the application level with additional charges associated with specific transaction usage.