Risk Management System

RMS Limits
How to view a particular clients margin availability?
Click on View Limits under RMS Limits window or press Ctrl+Shift+V to know about
present value and present position.
It is used for viewing the RMS limits of the :
     Broker
     Branch
     Dealer
     Client/Group
     Client.



Fig: RMS view limits window


Options available in RMS limits window:
1.User Option : Select any one to view RMS limits



Fig: Drop down list under User Option menu


2.Segment : Select any one segment or select all to view for all segments



3.Exchange : Select a particular exchange from the following or select all



4.Product : Select any one to know about a particular product or select all





How to set the limits for Branch, Dealer, Client group and Client?
Click on update limits under RMS Limits window or press Ctrl+Shift+U.



Fig: Update Limits window


Select client and double click on the present values, RMS Set Limits window will open with empty fields. Once the values are entered click on update button. The maximum limits that can be sent under these fields are 999999999. The fields are
     Cash Margin Avail
     Adhoc Margin
     Finance Limit
     Del.Amt.Limit
     Buy Security Qty. Limit
     Sell Security Qty. Limit
     Direct Collateral
     M to M loss Limit
     Exposure Limit
     Turnover Limit
     Sell Exp Limit
     Buy Exp Limit
     Notinal Cash
     Remarks Amt
     Remarks Text
     Buy Exp Opt Limit
     Sell Exp Opt Limit
     Buy Exp Fut Limit
     Sell Exp Fut Limit

The category name is to be selected from the drop down box



Right click on RMS update limits:
From the RMS update limit right click, user can find the option of Order Book, Trade Book, Refresh Positions,View/Update Holdings, RMS Cash Credit.



1.Write to Excel:-From the Present Values list content will write in the Excel Sheet.
2.Read From Excel:- From Excel sheet User will be able to read the values.
3.Customize:- Will change the color settings and the appearance of the list
4.Copy to Clip Board:- This option will copy the content from the list
5.Refresh Positions:- Will refresh the position from the dialog
6.RMS Cash Credit: - This option will open the Cash Creadit window
7.Update Holdings:- This will open the Update Holding window for the selected entity.
8.View Holdings:- This will open the View Holding window for the selected entity
9.Order Book:- For the selected Entity the Order Book details will display
10.Trade Book:- For the selected Entity the Trade Book details will display.



How to see the list of orders being rejected by RMS?
Click on Rejected List under RMS Limits window or press Ctrl+R



Fig: Rejected orders list


1.Hold Ctrl Key and double click on the rejected order; RMS Set Limits window will open where you can increase the limits.



2.Double click on the rejected order,RMS Cash Credit window will open where you can view the credit,debit and the net value of that rejected order you can also view this by selecting RMS cash credit under RMS limits window





How to view Holdings/Collateral?
Click On View Holdings/collateral values in Holdings under Surveillance menu.








How to view T1 Holdings?
Click On View T1 holdings in T1 Holdings under Surveillance menu.






Fig: Window to view T1 Holdings




Which are the Entity Levels where the RMS can be set or applied?
RMS can be set at Client Level, Client Group Level, User Level, Branch Level and at the Broker Level.



Which are other levels where RMS can be applied?
RMS limits and validations checks can also be implemented on an exchange level, that is, separate ledgers may be maintained for different exchanges available in Nest Trader application or on a segment level or product level or a Trading symbol wise. RMS Admin has a flexibility to apply RMS on any combination mention above.



Which is the basic level from where the RMS is started?
Client Level is the basic level from where the RMS validation starts if the rms process is started at client level.



Which is the First step for implementation of RMS at any level?
The first step to implementation of RMS is to add an RMS Category. This can be done by clicking on the Surveillance Menu (in Nest Trader) -> Category -> Add Category.



What is the use of Branch Adhoc to client under RMS Update limit in surveillance menu?
If a Admin has allocated Branch Adhoc money to a Branch Admin then from Branch Adhoc to client window a Branch Admin can give the Adhoc limits to the clients which falls under that particular branch. Admin has to specify the amount in Branch Adhoc and Max Branch Adhoc for a branch admin while settings the limits.



What is the use of Position Alerts window?
Through position alert admin has a facility to square off the position taken by client if the Mark to mark/Margin percentage set in a category has been violated. This window will get automatically popped up with the clients and their position taken if the MTM / Margin has breached. Admin has to just click on the Square off Button to square off all the positions. To get applicable of this facility MTM / Margin Square off rule must be included in the Category.



What is the use of RMS Surveillance screen?
RMS Surveillance screen is only to monitor the Mark to Market of the clients which are set for clients in the category. In this window the record of the clients will automatically come based on the timer set in the backend. There are various timers for the MTM percentage can be set in backend on the basis of which the record will get reflected in this screen. For e.g. 90% to 70% at every 10 sec., 69% to 50% at every 60 sec.



What is the use of Client Cash Credit window?
Client cash credit window is used to see the details of the Net Balance Available with the client. It is calculated after doing the calculation of Total Margin Available – Margin Blocked on the position along with MTM.



How to add or make the new category?
New category can be made from Surveillance Menu -> Category -> Add Category (Shortcut Key – SHIFT + ALT + Y). This will open the Add Category window in which user has to specify the Category name in the Box provided. Specify the necessary parameters and rules which RMS has to check before placing the orders to exchange and the click



How to modify the category?
Existing category can be modified from Surveillance Menu -> Category -> Modify Category (Shortcut Key – SHIFT + ALT + M). Select the category which is to be modified from the drop down window provided under category name and change the parameter or rules which need to be added in category and then select modify button.



How to View the category?
Existing category can be viewed from Surveillance Menu -> Category -> Modify Category (Shortcut Key – SHIFT + ALT + V). Select the category which is to be viewed from the drop down window provided under category name.



How to update and view the holding?
Holding for the clients can be updated in two ways either it can be updated manually. In the Surveillance menu -> Holding -> Update Holding needs to be selected to update holding manually. If there are multiple records then file upload facility is available for uploading holdings at one go. In the Surveillance -> Holding window -> View Holdings needs to select to view the holding for a particular client.



How to BAN the Future contracts from Trading?
As NSE exchange stipulates Market wide limits for derivatives contracts; when these limits are breached, such symbols are banned for any entity for taking fresh positions in that symbol, wherein only squaring off of positions is allowed. The broker can ensure that orders are not placed in such banned symbols for taking fresh positions and only square off orders are allowed, by adding those symbols in the ‘RMS Ban Symbols’ list. This can be done on a Global level or on a Broker level.



How to square off the positions taken for Intra Day in MIS product?
To square off then position taken in Intra Day i.e. in MIS product RMS admin needs to select the Execute Auto Square off option in Surveillance menu. System will place the opposite orders with the market and square off all the position taken by clients. To cancel the open orders which are pending in order book at exchange RMS User needs to select Execute Pre-Auto Square off option in Surveillance menu.



How to square off the position for a particular or all clients taken in any products?
To square off the position of clients taken in any product, RMS admin can select Admin square off option in Surveillance menu. Admin can select a single client or all clients and a single product or the entire product as per the requirement.



Which are the products normally used for Retail purpose?
For retail purpose normally 2 products are used a) MIS and b) CNC. MIS product is used for doing intraday in which exposure is giving for trading and in CNC product delivery amount is deducted from the Ledger.



Why is the order going even the client does not have margin?
If the order is getting placed to exchange even if the cash is not available in clients account then first we need to check the orders is routed through RMS. For this purpose in entity manager check for the user that Route to RMS is Yes or NO for exchange. If this is fine then also then also check appropriate rules are added in the category with proper parameters in margin / exposure factors.



Why is the order going for the Dealers who are placing for PRO without Margin or MTM Check?
If the order are getting place to exchange even if the MTM is breached or Cash given then first check that Route to RMS is YES or NO. If this fine then please check in entity manager under a Dealer a dummy client is MAP as without this RMS will not work for the dealer. If all is fine then finally in Backend Dealer wise is to be started instead of client wise.



What are the different types of Margin charged by NSE Exchange for Future and Option contracts and what care needs to taken in our system?
NSE charge Span Margin and Exposure margin for Future and Option contracts. Span margin and Exposure is uploaded from backend. For Exposure margin care should be taken that Exchange does not specify the percentages for the indices so brokers needs to manually define the percentage of the indices in the csv file and then upload the exposure margin file.



What is chargeable when a client buys the option stock i.e. call or put?
When any option call / put is bought either call or a put NSE charge only the premium is charged i.e. Qty * price of the call/put of the contract.



What is chargeable when a client sells the option stock i.e. call or put?
When the clients sells the option call or put then a margin in charged and a premium amount is credit to client account as per NSE Exchange rule.



How to give the clients to trade on the basis of Turnover?
If the brokers wants to give the clients to trade on the basis of Turnover then Turnover order level Limit rules needs to included in the category and specify the amount in the Turnover order level limit field in the RMS Set Limit window.



Which are the rules used for calculation of Mark to Market (MTM)?
For calculating MTM general rules used are Unrealised and Realised Profit and Loss rules. RMS User can specify segment wise rules of Unrealised and Realised profit and Loss if RMS is set at a different segment levels.



How to square off the position of clients on the basis of Mark to Market?
A.For this facility RMS Admin needs to include the rule of MTM Square off and specify the percentage in MTM Square off percentage in category for all the clients.



Is it possible that for HNI or specific client Auto square should not be applicable for the position take in MIS?
Yes , RMS Admin needs to include the rule Don’t Auto Square off rule in the category for this type of client or there is another option of Auto Exclusion List in Surveillance menu in this client should be included in the exclusion list.



What is the use of Scrip Basket option in Surveillance Menu?
Scrip Basket is used to allow the dealer to trade only those scrips which are specified in the scrip basket window. Scrip Basket is created from Surveillance -> Scrip Basket Add Scrip Basket. Once Basket is created it is to be assigned to the category through Assign Scrip Basket option and finally in category Assign Basket rule needs to be included in catgory.



Is it possible to define the customized percentages for margin to be charged for stocks?
Yes while creating basket margin percentage can be define for all stocks. Also it is possible to define different percentage for different stocks while creating a basket and the assign to category. Additional rule of scrip basket margin order level is to be defined in the category along with Assign scrip basket.



How to Block the Entities / Contracts / Expiries / Strike price or any combination from trading?
RMS blocking in Surveillance menu provides a tool for the broker to simply block trading altogether or for some entities in certain contracts / stocks / groups / particular or all expiries / particular or all strike prices or in any combination as per requirement. In Surveillance Menu -> RMS Blocking -> RMS Block select the entity specified above and the click on Block Button.



Is it possible to block the entities for Buy and Sell differently from trading?
While blocking the entity in RMS Block/Unblock window option is provided for Buy,Sell or Both. So RMS admin can select the Buy to block buying only and Sell to block selling only. If full block is to be done then Both should selected which will restrict Both buy and sell.



Is it possible that client can square off the previous positions taken after blocking?
Yes while blocking the entity in Block Type select NON Square off option which will allow the client to see the previous position but will not allow to create any new positions.



Is it possible to block the category?
Yes, In Block window any RMS Category can be blocked and it will ensure that all the entities to which that category is assigned will not be able to trade on that scrip depending on the type of block set.



How to unblock the Entities / Contract Expires / Strike price which are already blocked?
Once the blocks are set, the user can view the type of blocks set by clicking on the ‘View Block’ option in RMS Block Orders window. The blocks set can be viewed, and if required, any single block can be unblocked from the RMS Block window, by selecting the block set and clicking on ‘Unblock’.



Is it possible to block the entities on the basis of products?
Yes, in block window products dropdown option is available from where user can select the products which needs to be blocked. For e.g. MIS product should be block for Trade to Trade stocks i.e. BE series in NSE exchange and T and Z group in BSE Exchange. This can be done by selecting the product MIS and the required groups from the exchange fields



From where RMS user can monitor the Risk Management Values for the clients?
RMS Monitoring can be done from the RMS View Limits window in Surveillance window. This section displays the current values based on the open orders, position taken, position square off along with the MTM if the appropriate rules are added in category. User can select single client or can see values for All client if user double click on ALL option in filter window.



Can we define the scrip wise position / exposure limits?
Yes, through scrip group option in surveillance it is possible to define the position limit or exposure limits for different scrips or contracts. This is applicable to the category to which the scrip group is assigned. File upload is available for this option.



Can we define the additional margin to be charged for cash stocks?
Yes, through scrip margin in surveillance menu it is possible to define the addition margin for each stock. Additionally Scrip margin order level rule is to be added in category. File upload is available for this option.



Can we define Broker wise / Client wise limits for cash stocks?
A.Yes, through scrip margin window we can define the Broker position limit as well as Client position limit for each stock. Additionally Position Limit rule is to be included in the category window.



How can I set  the category for a client who wants to  maintain separate ledger at Equity Derivatives / Commodity / Currency Level?
All Level rules (Equity and Derivatives) 
Assigned basket
Check Circuit Limit
Check Freez Quantity for FO including Square off order
Check Holdings
Check CAC Amount used
Check Option Intrinsic value
Consider Collateral
Consider Collateral on negative Cash margin
Consider Realized PNL for Cash and FO 
Consider UnRealized Loss only for Cash and FO based on LTP
Dont check COM orders at this level
Dont Consider Currency margin in this level
Exposure Margin FO order Level
FO Assigned basket
Margin Square off
Mtom Square off
NFO Spread Benefit
Order Quantity
Order Value
Scrip Basket Margin Order level
Span Margin FO order Level

Commodity Level rules
Addition Margin
Additional Pre Expiry margin
Check Circuit Limit
COM Assigned basket
Consider Realized Profit and Loss for commodity
Consider UnRealized Loss only for commodity
Delivery Margin
MtoM Square off
Order Quantity
Order Value
Span margin commodity order level
Special Margin
Tender Margin

Currency Level rules
Check Circuit Limit
Consider Realized Profit and Loss
Consider UnRealized Loss based on LTP
Exposure Margin CDS order level
MtoM Square off
Order Quantity
Order Value
Span margin  order level



Download (PDF)

Expand all Collapse all