TMX Group Offers Equity Pre-Trade Risk

TMX Group will start providing its equity trading clients with a comprehensive pre-trade risk solution, called The TMX Pre-trade Risk Management Solution.

The operator of the Toronto Stock Exchange will provide clients with connectivity and technology for pre-trade risk-filtered access to all Canadian equity marketplaces. Along with Australia, Canada emerged from the 2008 credit crisis relatively unscathed due to their intensive risk procedures, according to industry experts.

"We are offering a low latency and functionally rich solution to assist participants in managing the risks associated with electronic trading and to help comply with the upcoming regulatory and financial risk management obligations mandated by regulators," says Robert Fotheringham, senior vice president of trading. "Our flexible solution also enables participants to leverage the economies of scale of an exchange-hosted solution to manage order flow, market access, and risk across the whole market."

The framework of the hosted risk solution hails from Mantara, a risk solution firm that also provides a "kill switch" to stop rogue algos like the one that lost Knight Capital $400 million in an out of control trade last week and forced the firm to split up in order to survive. "We are privileged that Mantara's technology has been chosen as the foundation for TMX Group's risk offering," says Michael Chin, CEO and president, Mantara.

Chin continues, "Our selection serves as further validation that our advanced risk technology meets the ultra-low latency requirements and rigorous demands of exchanges as they provide their clients with the best-of-market solutions."

TMX Group's key subsidiaries operate cash and derivative markets for multiple asset classes and firms such as the Toronto Stock Exchange, TSX Venture Exchange, TMX Select, Montreal Exchange, Canadian Derivatives Clearing Corporation, and other TMX Group companies.

Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio