The QUIK KillSwitch module’s purpose is the use of the exchange KillSwitch technology which reacts to a break-up of a drop copy connection (or to a transaction of a specified type) in case of violation of risk parameters set by the broker.
QUIK KillSwitch variations
- QUIK KillSwitch (LSE spot)
- QUIK KillSwitch (MOEX spot)
- QUIK KillSwitch (MOEX FX)
- QUIK KillSwitch (MOEX FM)
The module is currently applied to online risk control of access provided by brokers to their clients for trading on spot markets of Moscow Exchange (stock and FX markets), derivatives market of Moscow Exchange, and spot market of LSE (London Stock Exchange) on the sponsored access basis.
Risk functionality is provided by the server and special user applications of the QUIK platform (RISQ solutions).
QUIK KillSwitch for LSE is certified by LSE as operationally compatible with the exchange’s own risk control system.
Solution infrastructure (for LSE)
Comments to the Scheme
- (1) The Client’s trading platform is connected to a corresponding trading system of Moscow Exchange or LSE with the help of its broker’s IDs. Forwarded orders do not undergo pre-trade risk checks on the broker’s server.
- (2) Simple pre-trade checks are performed by the exchange in accordance with settings selected by the broker. Possible checks include determination of a price range, a maximum order size, instruments available for trading, etc. The LSE trading system can also check a number of instruments in the order, a maximum total order volume for a trading session, and a maximum number of transactions per second. The client is not allowed to forward unpriced orders (market orders).
- (3) Complex risk checks (dynamic revaluation of purchasing power with account for trading various instruments and active orders, portfolio margining for optimized collateral based on complex risk evaluation models) are carried out by the RISQ server.
- (4) Market data and information about all orders and trades of the broker’s clients (drop copy) are delivered to the RISQ server through a standard QUIK interface to the trading system (Moscow Exchange Securities Market trading interface, Moscow Exchange FX Market trading interface, Moscow Exchange Derivatives Market trading interface, LSE trading interface). As long as the risk level of the client’s operations remains acceptable for the broker, the latter’s risk control system does not affect the execution speed of operations from the client’s trading platform. If risk calculations require information about transactions executed on other markets, the market data from those markets can be obtained through QUIK interfaces to corresponding trading venues.
In the LSE case, there are alternative ways of receiving market data and information about transactions on the spot market of this exchange:
- FIS Global Network program interface,
- Market data from one of the information interfaces (FIS Global Network market data interface, Market data interface of Refinitiv (Elektron Data Platform), Iress market data interface) and drop copy from LSE.
- (5) On receiving the drop copy for each trade of the client, the RISQ server reports to QUIK KillSwitch on whether further trading for the client is possible.
- (6) Whenever risks of the client’s operations exceed criteria set as limits in the broker’s risk management system, the RISQ server sends a signal to the QUIK KillSwitch module that all further client’s operations are impossible. In the case of LSE, the QUIK KillSwitch module then terminates the drop copy connection set for this client. In cases of Moscow Exchange — QUIK KillSwitch sends to the exchange’s trading system a transaction prohibiting trading operations for the client’s ID specified in the settings and cancels the client’s active orders (optionally, depending on settings in QUIK KillSwitch). As for LSE, the clients’ working orders will be automatically cancelled by the exchange’s trading system in the following cases:
- When the broker activated the Kill Switch option for its client in the exchange risk management system;
- The drop copy connection is not used for a certain period of time;
- The sponsored access connection is not used for a certain period of time.
- (7) If, during the trading, the risk parameters set by the broker for the client are not breached, the information received by QUIK KillSwitch from the trading system is not used at all.
- (8) For the client, disconnection of drop copy (or a transaction sent to prohibit the trading) makes the exchange stop accepting the client’s orders forwarded through the sponsored access. Such orders are rejected.
As soon as the risk parameters are normal again: in the LSE case, the QUIK KillSwitch module restores the drop copy connection with the trading system and the exchange resumes accepting the client’s orders; in the Moscow Exchange case, the QUIK KillSwitch module sends to the trading system a transaction which allows trading for this client.
QUIK KillSwitch and the RISQ server must be installed as close to the exchange trading system as possible. QUIK KillSwitch is installed either on the broker’s computer connected to the QUIK server (RISQ server) via the TCP/IP protocol, or on the same computer as the QUIK server (RISQ server). The client’s trading platform software, which is used for sponsored access to the trading system of the exchange is certified by the clients on their own. The RISQ server and QUIK KillSwitch software are certified for the broker by ARQA Technologies.
QUIK KillSwitch may be purchased by the broker using the QUIK (RISQ) server. Copies of the module are acquired for clients connected to the exchange trading system through the sponsored access. The number of licenses should cover the number of simultaneous connections of QUIK KillSwitch to the RISQ server.
Hardware and Software Requirements
Processor Intel Xeon Gold 5118 or better,
2 GB RAM,
10 GB available hard disk space.
OS Windows Server 2008/2012/2016/2019 (x64).
The indicated hardware and software requirements are minimal. With sufficient resources the interface can be installed on one PC with the QUIK server. For additional information, please contact QUIK Technical Support.
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