BFS Version: 2.X
When executing trades for your customers using investment funds there are a few common ways to go about it.
With the first option you do not have a way to net trades but you can aggregate the trades before transmitting the trades to the fund, this is called aggregation where buy orders and sell order can be aggregated together.
Using aggregation you would send the following trades to Fund A:
If you would pass the trades through your own book you would only have to send the netted trade to Fund A:
Using your own book there is also a possibility to fill the trades for your customers with you as the counterparty to the trades and then you can decide for yourself when to send the external order to the fund, during the time you will have a trading risk. |
This article will describe how to trade investment funds for your customers using your own book using Bricknode Financial Systems ("BFS").
There are a few prerequisites that are required before conducting these types of trades.
For this article we have created the following Fund company and Fund entity:
We have also created the following Fund Instrument:
Within external accounts for the house we have created a payment receiver for the fund:
The configuration for the execution interface of the type "External Fund" looks like this:
The configuration for the execution interface of the type "Internal" looks like this:
The quick movie below describes the flow of events that will take place when we continue with this actual trade.
Order entry can take place from the customer itself via the customer front end, by an advisor in the advisory interface or by a back office representative. For this article we will use the back office representative.
Navigate to a customer account and open the action menu in order to select a trade option.
Choose a product to trade.
View the movie below to understand the order process.
The next step is to generate external orders where trades are made with the actual investment fund on behalf of the customers. The external orders can be generated manually or by using the automated Netting of internal orders.
Since the Internal orders are being traded with the house book account as the counterparty we can now navigate to the house account and enter orders for the same fund using the Execution Interface External Fund as the trading route as the video below demonstrates.