Through its Trade Blotter (see here) and Risk Management Framework, Moment provides its partners with the ability to set precise risk policies for specific groups of users, monitor custom risk metrics for each group, and take emergency actions (e.g. institute a trading halt) for a specific group or across all groups. The sections below provide an overview of Moment's Risk Management Framework, as well as demonstrate how partner platforms can interact with the risk system through the Trade Blotter.
Moment's risk management framework is constructed around the concept of “risk groups.” A risk group is an arbitrary set of user accounts for which a certain set of risk controls are applicable. Risk groups enable Moment's partners to segment their users into cohorts for which the same risk controls should be enforced, the same risk metrics should be tracked and aggregated, and the same markups and other fees should be applied. The risk group framework is highly customizable — some of Moment's partners only have one risk group, while others have hundreds. Once a partner creates a new risk group on the trade blotter, the partner can immediately begin sending orders for that risk group; when submitting a new order to Moment's Trading API, the partner simply specifies the risk group against which the order should be validated.
When a partner creates a new risk group, they must set a “risk policy” for the group, which specifies a set of rules for approving and rejecting orders submitted for the risk group. Partners also have the option to create a “whitelist” for the group, which specifies all securities for which trading is enabled. When a partner submits an order to the Orders API, Moment's Validation Engine uses the risk policy and whitelist to either approve or reject the order. Both approvals and rejections are communicated to customers via the Real-Time Orders Websocket API. Moment also enables partners to set a fee schedule for each risk group. When a risk group has an active fee schedule, Moment will automatically charge the relevant markup or commission when booking the trade with the partner's custodian.
A risk policy specifies a set of risk controls against which every order submitted for the risk group will be validated. Currently, Moment's partners can set the following risk controls:
A risk group's risk policy also includes an “Enable whitelist” flag. This provides the option for the partner to set a specific list of bonds for which trading is permitted. If the whitelist is enabled, Moment's validation engine will only approve orders for bonds in the whitelist; all other orders will be rejected. In the future, Moment will also offer functionality to share whitelists or set a default whitelist across risk groups.