BATS Global Markets has made its no-cost risk management tools available to all U.S. equities and option markets customers. Previously, they were available only to its sponsoring members.
The risk controls were created in response to the Securities and Exchange Commission’s market access rule 15c3-5, which went into effect last year. The rule requires all orders to go through risk checks before going out to the marketplace. BATS said the checks add little, if any, latency to inbound equities and options orders.
The customizable port-level risk management tools give clients pre-trade risk protection, BATS officials said.
Users set order restrictions, maximum per-order limits and member-controlled order cutoffs. These “kill switches” can be used to cancel all open orders and block new orders.
“We believe that a multilayered approach to risk management, with various risk checks in place both on the member and exchange side during the life of an order, is fundamental to ensuring markets remain resilient,” BATS president and chief executive CEO Joe Ratterman said in a release.
The risk management controls can be viewed and configured through a secure Web interface, the BATS Member Web Portal, or automated and systemically controlled through the BATS Secure Web API.
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