Intercontinental Exchange. has filed a patent for an electronic trading system that implements risk mitigation methods for market participants. The system tracks breaches of risk thresholds, disables trading if breaches exceed a maximum, and limits re-enablement requests. This method aims to enhance risk management in electronic trading. GlobalData’s report on Intercontinental Exchange gives a 360-degree view of the company including its patenting strategy. Buy the report here.
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According to GlobalData’s company profile on Intercontinental Exchange, Retail trading platforms was a key innovation area identified from patents. Intercontinental Exchange's grant share as of January 2024 was 66%. Grant share is based on the ratio of number of grants to total number of patents.
Risk mitigation methods for electronic trading system
The patent application (Publication Number: US20240029163A1) describes a computer-implemented method for risk mitigation in electronic transactions. The method involves receiving electronic messages indicating breaches of predetermined thresholds from active users, determining if breaches occurred within a rolling time period, and automatically disabling the user's status if the total number of breaches exceeds a set maximum. Any pending transactions are canceled, and additional transactions from the user are rejected. Re-enablement requests are tracked, and the user's status can be re-enabled based on specific criteria, allowing further transactions.
The method includes features such as incrementing breach counts, activating counters upon the first breach within a time period, and tracking re-enablement requests relative to a predetermined threshold to prevent runaway conditions. A risk-reset event can trigger re-enabling the user's status, along with generating alerts for the user when their status is disabled. The system is designed to efficiently manage risk in electronic transactions by monitoring user behavior, responding to breaches promptly, and implementing safeguards to prevent unauthorized transactions. The method is particularly relevant for users such as agency brokers, market makers, and proprietary traders, ensuring secure and controlled transaction processing.
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