Telecommunications provider BT and agency broker Lime Brokerage have launched a low-latency pre-trade risk control solution for broker-dealers, designed to help them comply with new US Securities and Exchange Commission (SEC) rules.
Under SEC Rule 15c3-5, passed November 2010, broker-dealers are required to ensure all client flow passes through adequate pre-trade risk management systems on the way to market. The deadline for implementation of the rule – which bans ”naked' access to trading venues – is 14 July.
Through its agreement with BT, Lime will provide members of the BT Radianz
community with an ultra-low latency and SEC-compliant risk control solution. Broker-dealers not already connected to BT Radianz can place an order for service access, enabling them to employ the solution.
The BT Radianz shared market infrastructure is a managed solution offering users secure connectivity and hosting. BT Radianz offers access to pre-trade, trading and post-trade and cross-asset applications.
The BT service can deliver round-trip communication with the Lime platform measured in single-digit milliseconds, depending on where the customer's trading infrastructure is located. It also provides all pre-trade checks in less than 10 microseconds, including reasonableness checks, throughput limits, buying power, open order exposure, long sale and easy-to-borrow/locates.
“We developed this 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,” said John Jacobs, director of operations at Lime Brokerage.
BT Radianz plans to expand its ultra-low latency connectivity to Paris through its BT Radianz Ultra offering. The service is expected to be available in June. BT Radianz Ultra is currently accessible in London, Chicago and New York.
The BT Radianz platform currently connects a community of some 14,000 financial customer locations around the world. BT is a wholly owned subsidiary of BT Group, which operates in 170 countries worldwide.