• “Will it hold up when volumes spike?” 

• “What happens if something breaks?” 

• “How can we change clearing firms without disrupting our business?” 

• “Who can we talk to when there is a problem?” 

• “What is your approach to keeping our customers’ data safe?” 

That’s the lens we design through at RQD*: not features first, but resilience, repeatability, and support. 

It starts with the fundamentals. We operate inside the world’s most robust regulatory framework, SEC registered, FINRA member, SIPC participant, and we’re directly connected to the core rails that power US clearing infrastructure: the Depository Trust and Clearing Corporation (DTCC) and the Options Clearing Corporation (OCC). Our systems are backed by a SOC 2 Type II attestation, because trust must be auditable, not assumed.  

Risk doesn’t get reviewed after the fact. It’s monitored continuously, so issues are surfaced early and handled with discipline. Security is engineered directly into the platform: cutting-edge cybersecurity powered by Microsoft Azure, end-to-end encryption, mandatory multi-factor authentication, plus regular vulnerability testing and audits. The goal isn’t just to be “secure”; it’s to be secure under real conditions, at scale. 

Then there’s the moment every firm worries about – migration. 

That’s why we built a production-mirror testing environment and staffed a dedicated migration team, with a track record of successful migrations with zero business interruption. Because stability isn’t just about steady-state operations, it’s about the transitions, too. 

And when everything is live, resilience must be measurable: 99.99% core system uptime, with geographically redundant infrastructure running active/active, supported by 24/7 monitoring and incident response.  

But uptime is only half the equation. When something does go wrong, you’re not routed to a ticket queue. You get a person who knows your setup and can act on it. 

That’s the RQD* standard: strength you can validate, stability you can count on, and security and support you can stand behind, especially when it matters most. 

Want to see what this looks like in practice? Let’s talk.

Contact Us – RQD*

The post ​​RQD: Resilience is Required appeared first on RQD*.

In a market landscape defined by increasing speed and complexity, there’s no universal approach to trading success. Why should correspondent clearing be any different?

Today, most market participants clear with brokers that rely on a small handful of closed-source, third-party providers for their core books-and-records functionality. The result is that correspondents have very little control over the infrastructure that defines processes including taking in trades, processing trades into positions, calculating margin requirements and tax lots, generating reports and the like. This lack of flexibility hampers flexibility and innovation and can prevent firms from efficiently carrying out their strategies.

At RQD, we take a different approach. Our modern technology stack and flexible platform enable us to do things that legacy providers simply can’t – and that includes supporting non-traditional workflows, new products, novel approaches and more. With this ability to take greater ownership of post-trade processes, correspondents can increase operational efficiency, differentiate themselves from the competition and ultimately pursue their goals with far greater precision.

Control Is Crucial

One of the defining features of RQD is that we are cloud native and in control of our own code base – a fairly standard configuration for fintechs, but nearly unheard of for clearing brokers.

Relying on third-party providers for books-and-records tools and the hardware they’re hosted on leaves most clearing brokers and, by extension, their correspondents with very little visibility and input into how their data is processed. In some cases, the clearing broker might be able to build a layer to make limited enhancements for flexibility or user experience. But when it comes to the core data, there’s only so much they can do.

This is essential, because while an increasing number of new brokers and trading applications are built on cutting-edge stacks, the majority of clearing brokers use significantly older technology. This requires these correspondents to simplify or “dumb down” their solution, which can greatly extend implementation timelines. In other words, innovation on the correspondent side has greatly outpaced that of the clearing side, causing significant friction for the market’s most innovative firms.

The rise of retail investing is another relevant trend. As this space becomes increasingly crowded, there is a growing need for firms to differentiate themselves from the Robinhoods and Webulls of the world, resulting in new and interesting tactics that may require a more flexible clearing partner.

One more factor is the increasing number of market participants seeking to become omnibus firms. Because omnibus firms handle all customer-facing interactions within their own walls, completing account transfers requires providing their clearing broker with client information it wouldn’t otherwise have, necessitating a dedicated interface. With legacy clearing providers, this custom functionality can take months or be impossible to stand up; with RQD, it’s a quick and straightforward process. With RQD, omnibus firms are able to instruct and respond to ACAT requests via API, allowing them to control the process.

Supporting these emerging business priorities is a major aspect of our custom approach, but it isn’t the only one. We strive to serve in a true partnership capacity to our clients – and that means liberally sharing our expertise on technology, risk and the industry at large. We have a keen understanding of operational best practices, regulatory priorities and other factors that can play a significant role in a firm’s trading success. In this way, our clients benefit not just from customizable technology, but also clear guidance on how to make the most of that customization.

Flexibility in Action

This combination of cutting-edge technology and industry expertise has enabled us to deliver custom solutions for a wide array of clients. The solutions we’ve built are as diverse as the clients we serve, but the common thread is greater efficiency and an enhanced ability to serve their own customers.

In one instance, a correspondent wanted to fully outsource its exchange fee calculations, including customized fees based on liquidity indicators received from exchanges. While this is typically done by the introducing broker, we were able to implement a powerful matrix that met the client’s needs, saving them from this highly technical work while empowering them with full control.

Another solution that we have implemented is pre-funding functionality, enabling the client to identify a set pre-funding threshold for inbound ACH. Instead of waiting multiple days for transfers to clear, we can instantly credit the customers’ accounts up to a certain amount, effectively enabling instant trading.

Other clients are working to support new asset classes and similarly innovative products. Beyond the technology, we also approach our pricing schedules in a custom and flexible manner to match whatever revenue model our clients are operating from.

We can support and streamline any and all of these priorities – and it’s all thanks to our unique tech stack, experienced team and custom approach.

Conclusion

If innovation and differentiation are keys to success in today’s markets, then legacy clearing providers inherently serve as obstacles to that success. “Good enough” isn’t good enough if it hampers your ability to achieve your vision and stand out from the competition. At RQD, we pride ourselves on offering the technology, people and support necessary for our clients to chart their own course, no matter what that may look like.

In continuing to hone our custom approach, we hope to not just aid our clients, but by extension bring about better outcomes for investors, greater market efficiency and innovation across the industry.

Interested in learning more about how we can build a solution that meets your every trading need? Get in touch with us via info@rqdclearing.com

The post ​​To Thrive in Modern Markets, a Custom Approach to Correspondent Clearing Is RQD appeared first on RQD*.

It’s no secret that for trade execution, the baseline expectations for a broker’s offering have increased sharply over the past few years. The markets are moving faster, technology is even more critical and activity is through the roof – particularly in options, where volumes in 2021 were up 32.2% versus 2020, which itself was a 52.4% increase over 2019, according to OCC. At the same time, advancements in Trade Cost Analytics (TCA) have made investors far more attuned to execution quality and the many factors that can influence it. All this has created an environment in which selecting the right executing broker is more important than ever.

While you might think of us as a clearing broker, RQD is an industry leader in execution as well. After spinning out of an established options market maker, we now serve a wide array of broker-dealer clients trading equities or options, helping them with everything from direct market access (DMA) and algos to risk checks and regulatory reporting.

Our senior team brings decades of experience, witnessing first-hand how the right combination of technology, expertise, flexibility and communication can produce powerful execution results. There are many high-quality offerings available to broker-dealer clients today, but in our experience, selecting a truly differentiated execution services partner requires scrutiny into these four elements. 

Customization

Market fragmentation has become a hot topic in recent years, and with good reason. But despite the increasing sophistication of market participants due to the proliferation of execution venues in both equities and options, most executing brokers offer little more than basic DMA and a small handful of static algorithms, most of which are relatively inflexible, especially at the user level.

To thrive in today’s markets, a higher level of configurability is needed – and our modular approach to execution technology delivers just that. We offer a growing list (40 today and counting) of highly customizable algorithms, and we’re regularly building bespoke strategies for our clients as well. Our smart order router can combine fee schedules from multiple routing destinations and manage them through a single FIX hub, with clients gaining the ability to make tweaks and adapt their strategies on an ongoing basis. That means that when traders want to execute, they can prioritize one type of venue over another, time-sync their execution or expose as much or as little to the market as they wish.  

This ability to trade in a targeted, customizable manner, combined with the right technology and expertise, provides our clients with maximum control.

Transparency

Truly optimized execution requires intelligence that goes beyond simple disclosures of routing decisions. By giving market participants unprecedented visibility into venues’ fee schedules and tiered pricing arrangements, we inject maximum clarity into the execution process.

These are touchy subjects in our industry – everyone knows their executing broker is profiting from their order flow, but when it comes to the ongoing relationship with their clients, there’s little to no discussion of the precise economics. It’s understandable, but in a world where fees and pricing tiers can – for better or worse – serve as flashpoints in debates over our market structure and whom it serves, it’s important to operate with full transparency.

When it comes to these issues, we take a collaborative, consultative posture, helping our clients understand the implications of fees and rebates for any given order. We make them true partners in the decision-making process around routing by keeping on top of fee schedule changes and determining together exactly how those should impact the routing table. We’ll work with you to develop a highly customized fee schedules tailored to an account’s trading strategy. .

Because fee filings and routing economics contain so many intricacies, market participants often don’t realize just how much their executing broker is keeping them in the dark. We believe being forthright with our clients delivers better results and forges stronger relationships. In other words, it’s simply good business.

Expertise

Our ability to deliver scalable, customizable functionality and essential information is a result of the knowledge and expertise of our team – both as technologists and trade execution practitioners.

Our modular approach to development unlocks a wide range of flexibility benefits for clients. In addition to being easily configurable, our algos offer a high level of integrability with trading platforms and other systems, for both our clients and their customers, as well as the ability to be white labeled for any purpose. Our technologists frequently help clients refine algo logic, optimize integrations with additional parts of their trading stack and solve other tough challenges. And the fact that our solution is built in-house means we fully control our own code base, allowing us to act quickly.

Beyond our veteran technology team, our client-facing organization also includes experienced traders, clearing executives, securities lawyers and more. We bring a deep understanding of execution venues – including the order types and fee structures that differentiate one from another – and how the ecosystem impacts your ability to deliver best execution to your end clients. Because we’ve sat in your seat, we know exactly what our broker-dealer clients are looking for – and thanks to our collective knowledge, we are uniquely well-positioned to provide it.

Totality

While customization, transparency and expertise are key qualities, they are not enough on their own. Executing brokers can deliver value in a wide variety of ways, and we seek to incorporate as many as possible into our offering, making it a truly comprehensive execution solution.

For example, we offer ultra-low-latency market access, built out of our market-making stack and adapted for the unique needs of our clients. We also help with phases of the trade lifecycle beyond execution, from post-trade allocation to compliance and reporting. And we offer all this at a lower cost than comparable providers, protecting our clients’ bottom line.

One more factor is our status as a market leader in the correspondent clearing space. While it’s not necessary to keep your clearing and execution under one roof, this approach can increase efficiency while providing access to an array of additional differentiated services, contributing to the overall offering.

Putting it All Together

It’s hard to achieve success in today’s markets – and even harder when you’re stuck with cookie-cutter algos and limited visibility into the totality of your costs. We hope this article has given you a better sense of how customization, transparency, expertise can enable advanced execution – and why RQD has all the necessary factors in place to make them a reality.

As we continue to spread the word about our execution services, our goal is to help the industry embrace these enhanced capabilities and work with us to approach the markets with their best foot forward. Interested in learning more? Don’t hesitate to reach out to sales@rqdclearing.com.

The post The Four Key Elements to Selecting the Right Executing Broker appeared first on RQD*.

While we’re just formally launching today, we are by no means newcomers to this space. Our roots extend from an options market maker, which we spun out of two years ago to build RQD. Our system’s been live with clients clearing through it for six months. And our management team brings not only extensive clearing sector experience, but also draws from the broader securities industry, including at firms including Goldman Sachs, UBS, Deutsche Bank, Morgan Stanley, Blackstone, Cboe and the SEC.

And there’s good reason for that. Unlike the other corners of the industry we’ve worked in, which have seen profound change and innovation, clearing has remained the same analog, batch-process-driven industry for the past 20+ years. That translates to increased risk, additional cost and an overall inability to meet the needs of today’s financial institutions.

Addressing those challenges is why we created this business. Our goal is simple: to deliver scalable, customizable solutions to support clients’ ever-expanding needs. This commitment is present in everything we do, from our use of the most modern technology to our painless integration process. We’ve envisioned a real-time future where clearing is simpler, more powerful and more secure. So that’s what we built.

But as sophisticated as our platform is, we’ve built it with a deep understanding of the realities of the capital markets. This is a serious business we’re in, with foundational technology like ours facilitating a critical step of the investment process for millions of people worldwide. For very good reason, brokers demand thoroughly tested clearing and custody solutions that meet stringent security and stability requirements. We’ve spent a tremendous amount of time and energy on this very issue, to which our FINRA, OCC, DTC, NSCC and various exchange memberships will attest.

Today marks an important step in our journey, but there are many more to go. We believe our business is an ideal solution for broker-dealers that service retail, institutional and active traders, as well as foreign financial institutions and proprietary trading firms. If you fall into any of those categories, expect to be hearing more from us. And if you’d like that to be sooner rather than later, don’t hesitate to drop us a line today.

As we like to say, the future of clearing is required. And the future of clearing is RQD.

The post ​​RQD: Ushering in the Modern Clearing Solution That’s Required appeared first on RQD*.