FTEN granted US patent for real-time risk management data cloud

Source: FTEN

FTEN, Inc. (FTEN) today announced that it has received a patent for its technology which provides real-time cross-market risk management and surveillance for electronically traded securities via aggregation, normalization and analysis of real-time 'drop copies.'

The U.S. Patent & Trademark Office awarded United States Patent No. 7,778,915 for FTEN's "Financial Data Processing System" effective today. The patent was initially filed and published by FTEN in 2003. The technology has enabled FTEN to become the largest processor of real-time securities risk management in the world - each trading day, FTEN provides real-time risk management and surveillance for up to 17 Billion executed shares of U.S. equities, accounting for $150 Billion in risk calculations per day.

Ted Myerson, CEO of FTEN, stated "Through its innovative technology, FTEN allows market participants to accomplish real-time cross-market risk management without having to change how and who they do business with today. In addition to alternative approaches of processing trades through a "common trunk system" to attain cross-market visibility or limiting trading to a single venue to achieve risk management from exchange-based risk systems, market participants can leverage FTEN's secure data cloud to achieve real-time cross-market risk management for electronic trading. It is our hope that regulators will also consider similar secure data cloud approaches to achieve broader systemic risk management objectives of increased transparency, accountability and control."

"Furthermore, the flexibility afforded by FTEN's risk management approach is even more critical now as the industry awaits the imminent announcement by the U.S. Securities and Exchange Commission (SEC) of the real-time cross-market risk management requirements mandated by the SEC's Market Access Rule 15c3-5 with regard to sponsored access, naked access and oth er trading practices," Myerson continued.

Significant debate surrounds the benefits and concerns associated with high-speed electronic trading which has nearly replaced traditional floor- and telephone-based trading. In light of the 2008 financial crisis, regulators worldwide are evaluating more timely ways of assessing systemic risk to better manage the benefits of increased liquidity and price discovery resulting from high-speed electronic trading. The SEC and the EU Committee of European Securities Regulators (CESR) have announced initiatives regarding high-speed electronic equities trading; the Commission of the European Communities (EC Commission) has also announced guidelines for high-speed electronic trading of derivatives and the U.S. Commodity Futures Trading Commission (CFTC) is expected to take similar action in the near future.

FTEN's secure data cloud solution is consistent with the recently published International Organization of Securities Commissions (IOSCO) Principles for Direct Electronic Access to Markets (IOSCP DEA Guidelines). Principle 5 of the IOSCP Guideline states that "Markets should provide member firms with access to relevant pre and post-trade information (on a real time basis) to enable these firms to implement appropriate monitoring and risk management controls." FTEN's patented technology enables each market to provide real-time pre- and post-trade information to its member firms as necessary to support real-time cross-market risk management, surveillance and compliance.

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