NYSE Technologies to Offer Preventative for "Fat Finger" Syndrome

By: Ray Pellecchia

File Under: NYSE Technologies

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Securities Industry News reports that NYSE Technologies is rolling out a new "Risk Management Gateway"to help broker-dealers monitor and supervise the trading activity of market participants they sponsor. Excerpt:

"The motivation behind building out the RMG is to effectively provide an exchange facility service that allows our customers, the sell side firms, to connect to their customers in a way that fulfills anticipated regulatory requirements and agrees with what we think is a safe and orderly way to operate that function in the marketplace," said Murray White, senior vice president of NYSE Technologies.

"The RMG gives you additional automated risk management layers for your sponsored access clients," said Keith Bliss, senior vice president at institutional brokerage and NYSE member Cuttone & Co., which offers sponsored access into the exchange. Because Cuttone's mnemonic-a unique identifier for each member firm tagged on the audit trail of all trades-is on those transactions, "we technically hold the risk for anything that would go wrong."

Cuttone conducts an inordinate amount of vetting for any client the firm gives sponsored access, he notes. "We're comfortable with our own process and procedures, but the risk management software will be a nice addition to layer into those protocols,'' Bliss said.

If the order is consistent with the order size, credit limit and other parameters set by the sponsoring member organization such as Cuttone and any other stock exchange member who can sponsor access into the exchange, the order would be permitted by the gateway to continue to the exchange's trading systems. If not, the gateway would return the order to the sponsored participant. The gateway would only interact with a Sponsored Participant's order prior to its receipt by the exchange's trading system.

Happy Tuesday, folks. Hey, according to the New York Times' "On This Day," today is the peerless Louis Armstrong's birthday (1901), and it was on this date in 1735 that a jury acquitted John Peter Zenger of the New York Weekly Journal of seditious libel -- a major milestone in the history of freedom of the press.