Can your business react quickly to sudden changes in market conditions?

Much has been said about a company’s ability to react quickly to changing market conditions. The 2008-2009 financial collapse and subsequent crisis of confidence resulted in a normally quiet government body, the Securities and Exchange Commission (SEC), reacting to criticism by ordering a series of compliance changes that were sudden, forceful and , therefore, quite shocking in one sector of the economy: investment banks, brokers, and dealers. This impact was most evident when the SEC prohibited the short selling of a number of financial stocks (SECURITIES EXCHANGE ACT OF 1934, RELEASE NO. 34-58592 / September 18, 2008).

Let’s review a common process for responding to such regulation. The ban itself does not list the values ​​that are included in the mandate, but instead lists the SIC Standard Industrial Classification codes. Therefore, the fulfillment company will require a selection of the stock symbols and the marking of these symbols in the trading system. So there is an effective period. But this is not the end, just the beginning of a process that can take up valuable time and impede productivity. There are orders left in the system that need to be canceled as they are no longer allowed. Clients need to be notified, documents filed, new processes learned, etc. Most of these processes require significant intervention in normal business processes, which is time consuming and costly.

An alternative approach would be to use policy-driven services, enterprise integration with the existing business system to enact new business rules, communicate with customers about these changes, and monitor and manage the impact of these changes on all stakeholders involved. This futuristic scenario was the basis for the policy management application requirement that was made for an investment bank in anticipation of an SEC-like mandate.

We had no time to waste and used the OASIS XACML standards to define and manage policies. An intuitive user interface allowed investment professionals to quickly sort through the myriad of stock exchanges, sectors, and tickers to define the subjects of each rule. The validity period of each rule is as simple as clicking on the calendar: no complex terminology, no intricate source code, no large technology teams. All rules were created and tested by subject matter experts within days of promulgation. Time was better spent validating accuracy rather than manually coding something that will be gone in a few months and has no commercial value. The cost savings have gone far beyond resources as everything is clearly documented, verifiable and meets government requirements.

A sample of this creative and effective solution can now be seen on our website and is powered by leading security standards, compliance processes and integration capabilities.