Thomson Reuters, the world’s leading sourceof intelligent information for businesses and professionals, has announced toprime broker banks the launch of new risk controls and net credit functionalityfor users of Thomson Reuters Matching. These will enable banks to set and gaugecredit against their trading counterparties, and prime brokers against theirend clients, creating greater efficiencies and the optimal use of credit on the Matching platform.
Thenew net credit functionality of Thomson Reuters Matching enables banks to seteffective credit limits for their clients and counterparties that reduce riskand support current trading styles and requirements. Currently, banks can setonly gross credit limits that do not represent the true credit risk.
“Everybusiness is prioritizing the need to make its money work smarter,” said PhilWeisberg, global head of FX, Thomson Reuters. “With net credit, banks canbenefit right away from more efficient credit usage and draw down. Thesechanges allow them to continue to trade with confidence at a time when firmsand the markets where they operate are focusing on operational risk andcontrols. That is good news for banks and for their end clients.”
Thenew functionality provides further safeguards for banks and their clients:Maximum Order Size protects against erroneous large trades; Maximum Open Orderslimits the number of resting orders (and so the maximum exposure) a client canhave in the market at any one time from open orders; and further controlsconfigure which currencies a counterparty can trade with the bank. Prime brokerbanks will now also have an enhanced programmatic kill switch to terminatetrading of any of their clients.
Thesenew features have been beta-tested with a small number of prime broker banksduring August and September, including J.P. Morgan and Citi.
Followingthe successful beta tests these features are available now to all prime brokerbanks and will be available shortly to all Thomson Reuters Matching clients.