ISE’s members can now define risk management limits for their own connections and sponsored access customers. The enhancements allow members to define the maximum quantity and the maximum notional value that can be entered on a per order or daily basis.
The new risk management limits will be available through PrecISE Trade, ISE’s proprietary front-end trading system. Orders that exceed the pre-defined limits will be rejected in both platforms.
ISE’s risk management tools also include order monitoring via PrecISE, FIX Trade Drop Copy Reports and the recently introduced FIX Order Drop Copy Feed, which allows exchange members to monitor firm and sponsored customer activity in real time. These reports are available for orders routed through PrecISE, FIX and API connections.
Boris Ilyevsky, managing director of ISE’s options exchange, said: “ISE’s new risk management limits give our members increased control over the orders that can be sent into the exchange, improving their risk management capabilities. Although the SEC has yet to make a determination on rules for sponsored access, we saw a need to proactively enhance the safeguards available to our member firms to complement existing risk management features for their own orders and for those of sponsored customers.”
