The problem
Groups usually have strict policies for subsidiaries’ derivatives business, but in practice:
- eligibility, plans and authorisations live in documents and approval forms, and nobody checks them in real time when orders are placed;
- subsidiaries report positions and P&L in monthly returns, so by the time the group sees them the risk has already built up;
- quarterly reports require data from many entities, and manual consolidation is slow and inconsistent;
- changing a trader’s authorisation takes rounds of formal notices, so it lags behind.
How Tranexio handles it
- Eligibility: maintain each subsidiary’s derivatives eligibility and permitted commodities; entities without eligibility cannot carry out that business.
- Plans: the group issues annual plan limits, subsidiaries break them into quarterly and daily plans, and plans take effect once approved.
- Authorisation: authorise traders by commodity, direction, quantity and validity period, with authorisations tied to trading accounts.
- Limits: each order consumes plan and authorisation limits in real time, and close-out releases them.
- Pre-order checks: before an order goes out through the multi-account trading gateway, the four-level control chain is checked step by step; failing any level rejects the order and records the reason.
- Submissions and reports: subsidiaries report through a single interface, the platform accepts submissions idempotently and supports returns and resubmission, and quarterly and monthly derivatives reports are produced to group requirements.
Key controls
| Control | How it works |
|---|---|
| Eligibility gate | Entities and commodities without eligibility cannot place orders |
| Plan gate | Orders exceeding annual, quarterly or daily plan limits are rejected |
| Authorisation gate | Orders outside the trader’s authorisation are rejected |
| Limit gate | Orders are rejected when available limit is insufficient |
| Submission trail | Every submission, return and resubmission records the version and user |