Lime Brokerage To Provide Pre-Trade Risk Controls via BT Radianz

Lime Brokerage has teamed up with global network provider BT to create pre-trade risk controls for other brokers and dealers that will need to comply with the new regulations taking effect this July.

The service— available immediately to members of the BT Radianz community— is designed to help users comply with the U.S. Securities and Exchange Commission (SEC) Rule 15c-3-5 by the July 14 implementation date.

Broker dealers that use the BT Radianz financial cloud can tap Lime’s pre-trade risk controls to comply with the SEC’s ban on naked access, according to both company’s in today’s joint announcement. “We designed this pre-trade risk solution not just for ourselves, but with all brokers and dealers in mind — from large firms to mid-tier and smaller organizations. And we developed this innovative service with BT to address what brokers and dealers have been asking for — a cost efficient, ultra-low latency and easy-to-implement process to comply with the SEC’s ruling,” comments John Jacobs, director of operations in Lime Brokerage, in the release.

The SEC’s “Risk Management Controls for Brokers or Dealers with Market Access” requires brokers and dealers to have risk controls in place before customers are provided access to the market. All broker dealer order flow, electronic or otherwise, will need to go through pre-trade risk management systems and processes, otherwise, the firm may be considered non-compliant and subject to possible fines, according to the BT/Lime Brokerage release.

Lime says it will provide members of the BT Radianz community with an ultra-low latency and SEC-compliant risk control solution, with the significant costs and resources needed to implement such systems on their own. Lime’s comprehensive solution provides all inline pre-trade checks in less than 10 microseconds, including reasonable checks, throughput limits, buying power, open order exposure, long sale and easy-to-borrow/locates, among others, states the release.

Lime has been an early advocate of mandatory pre-trade risk controls and began designing its co-located market access risk systems in March 2009 with introduction to clients last spring.

BT, a leader in supplying network-centric services to the global financial community, provides high performance, reliable and secure access to more than 15,000 customer locations to over 400 service providers through its BT Radianz cloud. In the same press statement, Jose’ Antonio Marquez, managing director, BT & Payments, saidthe hurdles clients are facing in meeting new regulatory demands in a timely and cost-efficient manner can be a significant technology challenge. “We are proud to be able to work with Lime Brokerage, well-known as a financial technology innovator in the U.S., to provide an integrated solution to the fast-approaching naked access ban.”

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio