Droit, a technology firm serving institutional clients, has received patent approval for an upgrade to its global regulatory decision-making platform ‘Adept’, allowing users to evaluate the permissibility of trades and preview the incoming impact of upcoming regulatory changes.
Brock Arnason
Specifically, the upgrade – named ‘explore mode’ – concerns decision-making across pre- and post-trade controls, allowing for full traceability in each step of traders’ transactions.
Speaking to The TRADE, Brock Arnason, founder and chief executive, Droit, explains: “We aim to grant clients early access to updated rules and analytic technology to help them understand the practical impact of regulatory change. With a longer lead time, firms can examine the portfolio impact of rule changes and get a jump on their upstream system updates.
“We’re largely focused on how we can add more value to our front-office clients in this space – a sort of pre pre-trade before you even get to the point of execution – and how we can help people with what you would call ‘sales desktop decisions’.”
Previously, Adept required complete transaction details in order to confirm regulatory requirements and obligations, or render ‘trade’ or ‘do not trade’ decisions.
However, with the ‘explore mode’ update, institutions can now explore ‘what if’ scenarios, discovering which transactions are possible exactly, as well as understanding the impact of regulatory decisions and compliance requirements.
Specifically, the new feature allows users of Droit to input only partial information and/or a desired outcome in order to identify possible scenarios that fit within defined constraints and meet the applicable rules and regulations.
A key example of increased efficiency relates to swap trading. You can directly answer common questions like ‘what types of interest rate swap am I permitted to trade with this client?’ or ’which of my clients can trade this particular credit default swap?’ It’s very useful,” explains Arnason.
“You can imagine if you are someone sitting in the front office, a salesperson soliciting client interest in a specific idea from the trading desk, it’s a fast way to know which of your clients can trade it. You don’t want to waste your time, or the clients’ time.”
Furthermore, when it comes to the post-trade offering, the newly patented technology allows firms to upload millions of transactions for bulk evaluation.
This factor in the regulatory reporting solution allows institutional firms to quickly identify common issues and prioritise remediation efforts, according to Droit.
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“This patent approval is a testament to the unique technology we’ve developed, enabling our clients to interact with our rules using the Adept platform in new and expanded way,” said Leith Dennis, head of Adept knowledge engineering, in an official announcement.