Trade wins

The development of electronic payments and settlement technology is now providing the financial world with substantial advancement opportunities. Duncan MacRae finds out how one Qatari bank is taking full advantage of state-of-the-art tehnology.

  • E-Mail
By  Duncan MacRae Published  June 19, 2007

|~|Ahmad-Atawneh,-system-devel.jpg|~|Atawneh: QNB is using PS-eTrade for processing transactions for two of Qatar’s most strategic brokers.|~|Qatar’s Securities Trading Market aspired for a contemporary trading environment and was keen to take advantage of value-adding investment. Qatar National Bank (QNB) and Dlala Holdings were two such members of the financial market. They opted to implement the ProgressSoft Securities Trading E-Settlement Solution, PS-eTrade. The main reason for this was what the bank describes as ProgressSoft’s long-standing experience in delivering pioneering business-critical financial solutions. “We opted for the ProgressSoft solution due to their commitment in delivering reliable, high performance solutions specialised in the banking sector,” explains Ali Ahmed Al Kuwari, general manager of technology and operations at Qatar National Bank. “They have already worked with us before on an electronic cheque clearing system and its integration with our banking system. In addition, ProgressSoft was dedicated to delivering the first phase of the PS-eTrade project within a tight timeline of one month. “The first phase of the Securities trading and electronic settlement (PS-eTrade) project – which provides securities online settlement between Qatar National Bank and Dlala Holdings brokerage firm – went live on the 1st of January in 2006. The second phase of the project, which expanded to include additional features to support multiple brokers, within the group brokerage firm, went live during August 2006.” Prior to the adoption of PS-eTrade, the process of securities trading on the Doha Stock Market (DSM) was based either on fully manual or semi-automated processes. Brokers were constantly subject to risky situations when carrying out trades for their investors, whose bank account information was not readily available to the brokers. The time wasted on the broker’s side to ensure the presence of enough funds in investor accounts meant there was always a chance the broker could suffer great losses. At this time, brokerage firms would request cheque or cash deposits from investors in order to avoid such scenarios. The complete trading payment and settlement process needed three working days. This drawn out time period between the actual trade and settlement contributed to additional risk as well as limiting company trade processing capacities. With PS-eTrade, Qatar National Bank has been able to address the inefficiencies and hindrances to the process of securities trading. The solution has simply replaced manual and semi-automated procedures with a fully electronic system, enabling the bank to conduct superior trading settlement operations. PS-eTrade is an end-to-end straight-through-processing (STP) system that links banks and brokers via a secure electronic payment network, controlled by a payment and settlement switch presented by the clearing house. The system facilitates online routing and settlement of trading transactions which can be conducted at the dealer, investor or broker level, passing through specially designed gateways at the broker and bank. It provides an electronic platform for online trading settlement between QNB and Dlala Holdings when trading on the Doha Stock Market. PS-eTrade gateways are implemented at QNB which, as a payment switch, can now conduct online routing and trading settlement and at Dlala where brokers are able to accept investors holding QNB accounts.||**|||~||~||~|This ceaseless communication between the two parties replaces batch processing with online real-time processing and launches an initial step towards T+1 settlement. “Dlala brokers can now query investor balance availability in an online transaction prior to carrying out the trade,” explains Al Kuwari. “Meanwhile, investors are able to release their funds as soon as the trading takes place and rely on instant funding through direct trading. “By fully automating the trading cycle starting from investor registration at the broker and stock market levels, the opening of new QNB investment accounts can directly take place at the moment of registration and investors can register online using internet interfaces and start trading immediately upon QNB account confirmation. “The solution is designed to provide all needed functionality starting from investor registration and account opening, passing through daily trading transactions to finally reaching settlement between QNB and Dlala accounts,” adds Al Kuwari. PS-eTrade introduces an upgraded securities trading platform that is geared for a changeover from the current T+3 settlement to T+1, subject to DSM approval. QNB believe this has guaranteed it flexible clearing and flexible settlement. Its functionality also allows fund transfers from brokerage accounts to investor accounts not only within the directly connected banks but to investor accounts around the world using normal wired transfer and SWIFT transactions. Guaranteeing an ultimately secure trading environment, PS-eTrade enforces high security measures with different user authentication and authorisation levels and a set of audit trails. The solution exploits modern digital communication and networking technologies to facilitate seamless integration between all contributing parties including the broker, bank and payment switch. Today, QNB, Dlala and their investing customers are embracing this e-trading experience, complemented by a rich array of genuine benefits. Real-time execution of trading transactions and online query of investor balance granted by PS-eTrade brings along improved risk management of the trading process, with significant time reduction and cut down losses in trade conduct. PS-eTrade has reduced overall costs of processing securities transactions by PS-eTrade by replacing the traditional routines with the system’s value-added functionality. It ensures proper conduct of trading transactions by monitoring query screens and providing a valuable set of reconciliation, ad-hoc and history reports. By enforcing the highest possible security mechanisms, PS-eTrade ensures appropriate access to the information involved in the trading process. “It was a great honour for me to work on such a strategic system,” says Ahmad Atawneh, system development specialist at ProgressSoft. Atawneh adds: “Currently Qatar National Bank is using the PS-eTrade system for processing daily trading transactions for two of Qatar’s most strategic brokers, Dlala and The Group, and we are in the process of adding more brokers in the near future.”||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code