A Cheat Sheet for a Market Go-live

When a brokerage house starts to conduct agency business on a new market, it has to prepare a FO/MO/BO system to handle the trade flow.

This is a quick overview based on my experience in such projects.

A cheat-sheet of a market go-live in BO function:

1. Static data:
   • instrument data: instrument (issue-level, market-level), cross references.
   • exchange data: exchange, country, calendar,
   • client data: SSI, confirmation template, commission rate
   • firm data: SSI, entity, book, ledger accounts
   • market specific charge rules
2. Trade Capture:
   • What are the trade types? Client/Market/Firm?
   • What are the new books for these trades? And would the books tie at EOD?
   • What entities would be involved in the new market? What is the multi-entity chain.
   • Who take care of the market risk? Do we have principal trades/error trades?
   • Do we support custody trades?
   • Is trade currency the same as the settlement currency (or not)?
   • What are source of the trade? File/JMS/MQ/Database?
   • When would the trades being fed? Realtime/EOD?
   • Do we allow manual booking of trades directly into BO system?
   • What is the trade amendment model? Amend vs. Cancel + New?
   • Should missing SSI always stop the trade from continuing to be processed? Firm SSI/Client SSI?
   • Market trades should allow charge recalculation? Client trade should not?
3. Trade Settlement:
   • How would SSI being sent out?
   • What's the settlement cycle? T+2? T+3? T+5?
   • What type of trades should be automatic settled in which market?
   • What's the write-off amount?
4. Fianancial:
   1. What are the posting events? Trade entry? Value date? Settlement?
   2. What are posting rules for this market? Map trades to chart of ledger accounts.
5. Reports:
   1. Book matching report - make sure agency book is flat at EOD.
   2. Open stock position report - measure the client's open stock position, for risk control.
   3. Open cash position report - measure the client's open cash position, for risk control.
   4. Profit report - measure the cumulative commission from agency business.
   5. Profit and Loss report - measure p&l on principal book.
   6. Custody trade report - custody positions the firm hold for clients.
   7. Daily cash movement report - daily movement of cash on each ledger account.
   8. Daily cash balance report - daily cash balance
   9. Other regulatory reports required by each exchange/regulatory.
6. Others:
   1. user roles and user accesses.
   2. EOD schedule
   3. IT Ops documentation