NEX Optimisation Fortifies FX Solutions Suite with Credit Rebalancer Tool

NEX Optimisation has helped shore up credit movements in the prime brokerage space with the launch of a new automated credit-rebalancing tool. The tool focuses on addressing limit over-allocation by prime brokers, having been designed in tandem with Citi.

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NEX’s Rebalancer tool performs a plethora of functions for prime brokers. The latest FX risk solution to be rolled out by the group, the tool will oversee the allocation of credit across client trading venues. This includes the facilitation and deployment of credit in a more cohesive manner from one platform to another.

This is important for prime brokers given that transfers occur in real time, allowing for improved allocations even with excess credit on a platform. Previously, clients were able to move credit across platforms, however disparities with credit levels across multiple platforms presented difficulties that ultimately stifled cohesive movement.

Real-time credit distribution

In order to correct for this, Rebalancer helps Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term existing ECN limit capabilities to allocate credit wherever the client trades. Consequently, prime brokers are able to mitigate the amount of excess carve out at each ECN, which caps exposure in the event of a negative event such as a technical issue or faulty algorithm.

Rebalancer went live earlier week across five leading ECNS, with additional platforms slated for deployment later this year. In addition to more streamlined credit use, the tool will be able to connect into another element of NEX Optimisation’s services suite, Traiana Designation Notice Manager.

By linking up with this service, Rebalancer will also allow for better management of designation notice limits. These notices are instrumental in identifying and communicating credit limits, along with which products and currencies a given client can trade – the service is widely adopted as a medium between FX prime brokers and executing brokers.

Rebalancer is the latest in a line of FX risk solutions that NEX Optimisation has implemented over the past five years. Prior tools include the introduction of CreditLink, Automated KillSwitch, the aforementioned Designation Notice Manager, triReduce CLS, and triBalance.

Sanjay Madgavkar, Global Head of FX Prime Brokerage at Citi, commented: “The development of Rebalancer is a very important milestone for the prime brokerage industry and we are very excited to see the product go live. This innovation will serve the needs of prime brokers as well as trading venues and clients, all of whom have an interest in enhancing Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term.”

“This is a further example of NEX Optimisation leading the way in risk mitigation in the FX market. Recent volatile markets and exceptional events have led FX prime brokers to intensify their focus on risk management. By allowing dynamic reallocation, Rebalancer will give these prime brokers further comfort, leading to more credit availability in the market as a whole,” reiterated Joanna Davies, Managing Director, Traiana.

The launch of Rebalancer is the second major update for NEX Optimisation this week, having earlier implemented its automated Settlement Netting Service. The OTC FX service was engineered to support bilateral settlement netting processes for market participants.