Front_office
  • Overview
  • Real-time Exchange Limits Monitoring
  • Trader Limits Monitoring

Concept

The RPM Framework is an exceptionally flexible platform allowing HOC to build a sophisticated solution for dynamic processing in today’s ever changing environment for Middle-Office Regulatory Compliance and integrated Front-Office Trading oversight. RPM secures, processes and delivers all critical components for the most demanding and complex reporting requirements.

RPM is a web-based interface and is hosted in the client’s back-end environment. This versatile platform and software allows for tremendous flexibility and powerful reporting capabilities. More recently and with the CFTC, FERC, FTC, SEC, and other regulatory bodies introducing continuous and complex requirements, Utility and Energy companies are expected to adhere to strict guidelines and protocols to avoid significant fines and/or other legal repercussions.

 

Challenges-Execttion

 

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Real-time Exchange Limits Monitoring

In today’s fast paced trading environment, it is imperative to monitor trading activities on numerous company levels and on an exchange level.Together with ICE, NYMEX, and NODAL exchanges defining product-code-based limits for commodity contracts, it is essential to have a near real-time position monitoring capabilities using an ETRM trade repository. Open positions are calculated by fetching and aggregating the ETRM system’s current day data with end of day positions from prior trading day.

This powerful, real-time exchange limits monitoring engine displays positions as a summary grid, including interactive charts and email notifications coupled with alert emails to indicate new products entering into violations. Positions are disclosed in number of lots and percentages, along with account wise drill-down for intra-company breakup. Customized row coloring option is also possible to highlight positions breaching limits or a pre-defined threshold

Spot, Single Future and All Month limits are stored in a common User Defined Table within RPM along with other key information like aggregate code, contract size, etc. Having a centralized table facilitates easy usability and maintenance. RPM also houses a dedicated Exemptions Master module to record approved exemptions applied with the exchange against various product codes in an extremely straightforward manner. Exemptions are displayed against respective product codes besides appropriate open positions.

Real-time positions data
Real-time positions data
Real-time positions data
Real-time charts sample

Trader Limits Monitoring

Traders in the Utility and Energy sector are exposed to various trading limits set by their specific organizations. RPM can closely monitor the limits for internal compliance, verifying that traders are complying with the guidelines defined by the business. RPM allows internal audits and external regulators to monitor trader activities in near real-time, as well as identify violations.

The User Defined Table module in RPM allows it to define limits by Commodity and Trade type. The limits monitored so far are the trade level dollar value, quantity, term, and duration along with aggregated daily limits for dollar and quantity. However, with the flexible nature of user defined tables and its configuration, RPM allows users to define any other limits that need monitoring.

A separate Notification Master is available in RPM and is used to define trader manager hierarchy. This is utilized to send intraday email alerts to managers about violations done by their traders. The violated records have a drill-down capability to assist trade level analysis with complete trade information.

Trader Limit Monitoring Report
Trader Limit Monitoring Report