Offering tailored solutions for broker firms in India’s evolving financial landscape: Interview with Sandeep Sabnani, Head of Equities Product Strategy at ION Markets

By Puja Sharma

ION’s Fidessa trading solution: Fidessa is an integrated trading solution offering order management, algo flows, and risk management across multiple asset classes and hundreds of markets worldwide.

In conversation with Sandeep Sabnani, Head of Equities Product Strategy and Growth at ION Markets.

How does ION Markets plan to address the unique risk management challenges faced by broker firms operating in the rapidly growing Indian equities market?

In a high-volume market like India, it’s vital to understand your risk position quickly. ION Fidessa’s risk monitoring dashboard allows traders to understand their risk position at a glance using a ‘traffic light’ system. This means brokers can set precise limits on their order flow at various levels of granularity, such as platform, exchange, market segment, or instrument.  Fully integrated with all order flow, including algorithmic orders, correct risk management can eliminate the need for external applications or manual risk calculations (for example, in Excel), saving brokers time and reducing the risk of errors.

The platform is equipped with built-in alerting capabilities, enabling brokers to establish warnings for parameters nearing their limits, as well as for actual breaches. Users can configure “kill switches” to disable order flow promptly with a single click – essential in high pressure, high volatility environments. These switches can be set at various levels for added flexibility and control. Fidessa’s risk manager is also equipped with comprehensive audit capabilities, allowing meticulous tracking of any modifications to risk parameters. This ensures an audit trail, vital for meeting compliance and regulatory requirements.

With the increasing complexity of financial transactions and market volatility, how does ION’s platform assist broker firms in effectively managing their treasury operations within the equities market?

As the Indian financial markets become increasingly complex, the ability to monitor and control customer trading activity across multiple asset classes is more important than ever. ION’s integrated trading platform and advanced trading tools allow customers to navigate this complex environment.

Fidessa’s risk management suite includes margin management tools to optimize the cash management of both firm and customers’ funds. Brokers can monitor both their clients’ and their own exposure, helping to mitigate the risk of exceeding exchange margin requirements. This maximizes trading opportunities and helps firms get the best possible returns from their investments. ION also helps customers to manage operational risk by providing a fully hosted and managed service, whereby ION’s dedicated teams monitor and manage the platform servers and infrastructure.

Furthermore, the Fidessa codebase is held in escrow, which helps mitigate vendor risk (that is, a vendor will cease trading and customers will lose access to support and maintenance). Although vendor risk is not widely considered now, it has potential major implications for brokers if not properly managed.

Considering the diverse needs of broker firms operating in India, how does ION ensure that its trading and risk management solutions are customizable and scalable to meet various business requirements?

Broker firms in India need the flexibility to add additional and advanced features according to their specific needs, such as algorithmic trading strategies, multi-leg algos, or indications of interest. This means a functionally rich service that supports their strategic goals, while being able to control their costs by choosing only the features they need.

ION provides a range of APIs and interfaces to the Fidessa platform, which uniquely allows brokers to build integrations with other in-house or third party systems. Fidessa is a multi-asset platform, supporting both equities and derivatives trading. It can also include normalized market data packages, allowing brokers to clearly understand the costs of the full service. The platform has a modular architecture, allowing brokers to add or remove trading capacity easily, based on the customer’s business needs. This reduces operational costs.

In light of the evolving regulatory landscape in India, particularly concerning risk management and treasury operations, how does the firm ensure compliance and regulatory adherence for broker firms utilizing its trading platform?

ION is a leading member of the global financial community and works closely with many of the leading trade bodies and communities, such as ASIFMA and the FIX Trading Community. We dedicate time and resources to understanding the latest regulatory developments and how they will impact our customers. We proactively scan the regulatory horizon around the world. We follow the same model of engagement for customers in India.

Our solutions have successfully supported customers through major global regulatory changes, such as MiFID II in the EU, the Consolidated Audit Trail (CAT) in the US, and client identifier requirements in Canada and Hong Kong. Global regulatory compliance is a crucial part of the Fidessa service, and we continue to invest in this area. For example we have released a range of updates to support the upcoming migration to T+1 settlement in the Americas markets.