Johannesburg, 29 Nov 2005
Barnard Jacobs Mellet (BJM) Securities boasts one of the leading agency derivative dealing teams in the country. This is according to a recent Financial Mail survey. The team relies on TradeworX Equity Derivatives to handle their risk management, position keeping, trade modelling, reconciliation, client reporting and arbitrage accounting for single stock futures trading.
The company recently invested in TradeworX, a software program for traders on the South African Futures Exchange (SAFEX) developed by local software development house, Barone, Budge and Dominick (BB&D) and RiskWorX, in an effort to streamline its reporting and procedures while improving accuracy of data.
As well as being a market leader in the single stock futures market, BJM offers agency trading in Index futures, options and single stock futures.
"We reached a point where the trading activity became too complex for our old system. We also needed a solution that would allow unlimited users to work on a single book. In addition, we required independent input on our pricing models," says futures trader Richard Bowman. "BJM researched the market for a product and came across TradeworX."
The hardware infrastructure required by TradeworX is not very onerous. The database resides on a server and the software on the licensed users` personal computers (PCs). The executable file is only 4 megabytes (MB) in size which is readily available in most dealing information and communications technology (ICT) environments. It is based on Microsoft`s .NET platform thus the .NET framework is required as a prerequisite before the TradeworX Equity Derivatives application can be installed.
BJM Securities` decision to implement TradeworX is part of a larger risk management and accounting strategy that will enable better service to clients. The solution is already integrated with the accounting reporting and reconciliation processes. The next step is to integrate TradeworX with the existing and future risk management strategies. TradeworX also provides price-making mechanisms for single stock futures.
BJM Securities conducted extensive market research to find a product that will suit their specific needs. They also needed a product that could offer additional functionality when required. Another preference was for a local product. The company found TradeworX featured flexibility that allowed for extensive product enhancement. Another benefit is that it is a South African developed and supported product developed by some of the best local expertise, namely BB&D and Riskworx. BB&D develops solutions for businesses that view IT as a strategic advantage and Riskworx is the pre-eminent South African-based financial services firm specialising in financial risk management and treasury issues.
"The project is almost complete. We ran the old system and TradeworX concurrently before going `live` to ensure smooth transition. The benefits of implementing TradeworX were realised very quickly. This contributes greatly to our client service. Our administration is also quicker and more accurate and we have greater visibility of information. The process of managing our risks and exposures is far more efficient and improves our ability to provide reports to clients," adds Bowman.
"We are fully compliant with legal requirements by making our information more accessible. The return on our TradeworX investment is quantifiable and well worth the cost. It will greatly assist BJM in being proficient at trading and continue to consolidate their position as a market leader in the single stock futures market."
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