KillSwitch program interface

The KillSwitch program interface'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.

KillSwitch program interface variations

  • KillSwitch (LSE SM)
  • KillSwitch (MOEX SM)
  • KillSwitch (MOEX FX)
  • 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).

KillSwitch program interface for LSE is certified by LSE as operationally compatible with the exchange’s own risk control system.

Solution infrastructure


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Explanations of the Diagram

  1. (1) The Client’s Trading platform is connected to the appropriate trading system of the Moscow Exchange or LSE using the Broker’s IDs. Submitted orders do not undergo pre-trade risk checks on the Broker’s server.
  2. (2) Simple pre-trade checks are arranged by the Exchange in accordance with the settings configured 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 the quantity of an instrument in the order, a limit of the maximum total trade volume for a trading session, and a maximum number of transactions per second. The client is not allowed to submit unpriced orders (market orders).
  3. (3) The RISQ server performs complex risk checks, including dynamic revaluation of purchasing power taking into account trading in various instruments and active orders, as well as portfolio margining with collateral optimization based on complex risk assessment models.
  4. (4) Market data and information about all orders and trades of the Broker’s clients are delivered to the RISQ server through a standard QUIK interface to the trading system em (Moscow Exchange Securities Market trading interface, Moscow Exchange FX Market trading interface, Moscow Exchange Derivatives Market trading interface, LSE Securities Market 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 operations executed on other markets, the market data from those markets can be obtained through QUIK interfaces to appropriate trading venues.

    In the case of LSE, there are alternative ways of receiving market data and information about operations on the spot market of this exchange:
  1. (5) On receiving data on each trade of the Client, the RISQ server reports to the KillSwitch program interface on whether further operations for the Client are possible or not.
  2. (6) Whenever the risks of the Client’s operations become unacceptable according to the criteria of the Broker’s risk management system, the RISQ server sends a signal to the KillSwitch program interface that all further Client’s operations are impossible. Further, in the case of the Moscow Exchange, 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 the settings in KillSwitch). In the case of LSE, the KillSwitch program interface terminates the drop copy connection configured for this Client; the clients’ active orders will be automatically canceled by the Trading system of LSE in the following cases:

    • The Broker has activated the Kill Switch option for its client in the Exchange’s risk management system;
    • The drop copy connection remains inactive for more than a certain period of time;
    • The sponsored access connection remains inactive for more than a certain period of time.
  3. (7) The Exchange stops accepting the client’s orders (rejects them) after receiving a prohibition signal from KillSwitch.

    As soon as the risk parameters return to normal: in the case of the Moscow Exchange, the KillSwitch program interface sends a transaction to the Trading system to resume trading operations for the Client; in the case of LSE, the KillSwitch program interface restores the drop copy connection with the Trading system, and LSE again permits trading operations for the Client.
KillSwitch program interface and the RISQ server must be installed as close to the exchange trading system as possible.

KillSwitch program interface 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 KillSwitch program interface are certified for the broker by ARQA Technologies.
KillSwitch program interface may be purchased by the broker using the QUIK (RISQ) server. Copies of the interface 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 KillSwitch to the RISQ server.

Hardware and Software Requirements

Hardware Software

Processor Intel Xeon Gold 5118 or better,

2 GB RAM,

10 GB available hard disk space.

OS Windows Server 2012/2016/2019/2022 (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.

Use Options

Purchase Managed services / System backup Software management Testing
Contacts
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ARQA Technologies
Created by — Nimax
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