Front Office 

Sofia Orders Register offers a full, transparent, real-time transaction flow and avoid cumbersome data reconciliation between systems.

The module is Consob compliant.

The full integration is possible with third-party trading tools, like MTS® and TradeWeb®. The Orders Register of Sofia allows the user to:

• improve, in terms of efficiency, the trading process by using instruments of order routing which guarantee a good level of automation of the process and the reduction in risks of errors
• manage efficiently and in complete safety the trading process, assuring that the orders registration is coherent with the authorization levels assigned to each users and with the authorized brokers
• keep track of each action completed on the orders and executions with automatic registration of the date, time and user relating to each event of input and variation.

The Orders Register of Sofia can be used together with order routing functions via FIX protocol, which allow the automation of the orders-executions exchange process with brokers and trading platforms.

By means of a suitable configuration of the user profiles it is possible to define the method of access to the Register (view-only or edit), assigning to each a user name that will be reported during the transaction registration.

In Sofia several orders registers can be managed for each company, each of them linked to distinct portfolios.

The access to each register can be assigned to specific users. Furthermore the access profiles can be detailed at portfolio level and for the type of financial instrument.

The user interface for orders insertion is designed to:

Speed-up data insertion:

• based on the type of transaction (buy security, buy repo, buy Invt Fund, etc.) the insertion screen is framed automatically so as to show only the fields relating to that particular transaction type
• if all the fundamental elements relating to the order have not been inserted, then the missing information is highlighted and the insertion cannot be confirmed

Support the decisions of the trader by supplying potentially relevant information associated to the security previously chosen for the transaction:

• where the Back Office has inserted warning or blocking messages in the securities data reference, or on specific holdings: these messages can be found in the insertion screen as soon as the financial instrument of the order is selected, thus preventing its registration if necessary
• respect of the minimum round lot and the minimum incremental cut, if inserted in the data references
• for data references in a portfolio, the financial, assets/liabilities and economic impacts of the eventual execution of the order on the different portfolios (manager, local, IFRS, treasury) are shown
• visualization of the absolute value:
• by single order
• for a list of orders
• by currency
• the Orders Register is interfaced with the Real Time Limits Monitor (available only for Sofia Client/Server), thus allowing the preventive control of the available cash, of the movements of cash due to the insertion of the order and the respect of the thresholds for maximum and minimum values possibly defined for the portfolio. While using the Limits Monitor, it is possible that an overrun of the thresholds defined produces a warning or blocks the insertion of the order.

The orders entry is facilitated by the possibility of automatically importing from an Excel file the orders (To Do List). The list of orders imported in the To Do List is received by the Orders Register sequentially and without interruption (if the introduced orders do not provoke an overrun or entry into a threshold warning of the imposed limits).

Based on the configuration of the investment processes, the module can involve:

• the introduction of orders with automatic execution
• the introduction of multiple orders, in which the trader inserts a unique order for a specific security and then divides the total quantity over several portfolios
• the introduction of a basket of orders
• the introduction of orders with a temporary broker; only in the executed phase the offers produced by the various brokers contacted and the data of the execution (details of best execution) are registered.

Upon the execution of the order, the transaction, ready for the settlement process, is generated in the portfolio. In case of error, the execution can either be corrected or reversed.

In order to formalize the division between users who are allowed to insert orders and users who are allowed to execute them, Sofia offers some add-on modules that allow to establish the strict division between orders emission and execution. Two specific add-on modules are strictly dedicated to the orders execution:

Sofia internal trading platform, the trading desk (TD) that allows traders to take in charge and execute efficiently the orders (orders cannot be inserted directly in the Trading Desk). Once the execution process is over, the execution is immediately reported to the Orders Register manager.

External trading platforms (BondVision®, TradeWeb®, FFastFill® or Charles River Development®) directly linked to Sofia through FIX, MSMQ and WMQ interfaces, that allow as well to conclude the orders execution process and to report it to the Orders Register once the process is over.

A specific transaction type, called target orders, allows to insert automatically a group of orders generated according to a defined goal. This transaction type permits to insert the automatic rebalancing of the assets in one or more portfolios. The available target orders are the following:

• Resetting c/a:
  allows to automatically generate orders that reset the current accounts whose currency is different from the portfolio currency
• Bring to:
  allows to rebalance the weight of one or more holdings for one or more portfolios (according to a portfolio segment)
• Model portfolio:
  allows to build, according to a defined investment strategy, a diversified model portfolio by including different asset types (shares, bonds, ETF, investment funds and liquidity). By comparing the model portfolio to real portfolio(s), an orders list is generated to bring the real portfolio as close as possible to the model portfolio.

 

The Real Time Limits Monitor allows the immediate control with respect to the limits of investment that weight upon the management of the portfolio. The controls are in real time and can be outlined at the level of:

Pre-trade

Compliance for the benefit of the Front Office, by means of simulations of the effects on the portfolio limits of the eventual execution of an order. Any feedback is provided to the user before the order registration.

Real time analysis of the portfolio limits status

This analysis can be carried out in any moment during the day and considers the instantaneous situation of portfolios and of pending orders.

Analysis ex-post for compliance or auditing

In Sofia all the events linked to the registration of orders that cause overrun limits are stored. Furthermore, the status of all of the outlined limits is daily saved in order to permit statistical analysis (frequency and duration of the overruns)

Control of the unitary limits on a group of orders

Limits can be defined with maximum flexibility with respect to both the definition of the portfolio segments and the choice of figures to which they refer. The Limits Monitor is linked in real time to both the portfolios and the Orders Register: in this way it is possible to simulate in real time the effects of the execution of an order with respect to the limits.

In terms of user interface, the Limits Monitor is integrated with the Orders Register of Sofia, both for the feedback of limit overruns above cited and for the availability of the cash situation.

The Order Register is updated in real time based on the present and future balances of the current accounts of the portfolio and on the possible execution of the pending orders. The Limits Monitor is proposed as a timely and flexible tool for the control – ex-ante for the Front Office and ex-post for the Back Office – of adherence to the legal, regulatory or managerial requirements with respect to:

• the minimum and/or maximum incidence of an investment or class of investments
• the maximum amount invested for a single issue
• the minimum and/or maximum number of financial instruments in a portfolio for a class of investments
• stop gain and stop loss

Particular attention is paid to the updating of the Treasury situation. The Monitor calculates in real time the variation of cash balances for the desired number of days following the reference date, according to the orders insertions and their executions.

The information regarding the monitored limits are historicized via an automatic saving of the situation at the end of each day. The functions of the Monitor can be used, other than for controlling the adherence to investment limits, to supply information regarding the asset allocation of a portfolio. The Monitor can be accessed via the normal visualization screens of Sofia or via Web. The latter method ensures that the information regarding the limits and asset allocation is available also for non-Sofia users.