Blockchain in securties

History of the Blockchain

Features of Blockchain

Digital

Chronologically updated

Cryptographically Sealed

Distributed

Main Industries Where Blockchain Could Be Used

How Blockchain work?

Concepts of Smart Contracts in blockchain

Blockchain use case — Trade Execution and Capture

  1. Client place order (buy/sell a security) to broker (trade execution)
  2. Broker records detail of client’s orders within order management system (manually or electronics)
  3. Order details are forwarded to Trader
  4. Trader enters the trade into the front office system. (trade capture), update trading position Trader decides whether to execute the trade on such terms (Order price is within market’s publish price etc.) Executed trade is handed over to the back office, then recorded to trading book without delay
  1. Broker records the detail of execution
  2. Broker contacts the client to advise whether the order is executed or not. Trade confirmation will be required to issued

Business’s problem

  • In some front office trade capture system, trade details are recorded manually by traders 🡪 trader will need maintain their trading position manually, keeping it updated with any trade 🡪Potential incorrectly recorded trade
  • Trade details required being sent to the back office immediately, without delay
  • The systems involved in capturing these trade details and client account information could easily be enhanced using blockchain technology

Suggestion and Expected Benefits by blockchain solution

  1. Clients CL can send messages to and place orders with their primary contact to Broker BF
  2. Broker record Order in Order Management System
  3. Broker BF forward the trade details in term sheet to Securities trader
  4. Securities Traders ST 1 enter the trade detail, update trading position to ledger. While Securities Traders ST2 performs risk management such as determining whether the client has enough money to trade, the order price is within market’s publish price, etc..
  5. Executed Trade is handed over to the BackOffice, conducted validation and recorded to the trading book.

Technical Solution

  • Technologies Used
  • Blockchain middleware: Hyperledger /Fabric
  • OS : Linux Ubuntu 16.04
  • Software : Sdk/nodejs 0.6.0/ API SDK
  • Container: Docker 1.12, nodejs 0.12.7/ Runtime engine
  • DB : MongodB 3.2 (Frontend web app)
  • Language : golang 1.6, Javascript ES6
  • Technologies Details
  • Using permissioned ledgers (private Blockchain) to store the trade details
  • Issuing asset-backed tokens for stock symbols
  • Inquiring data from Blockchain-based system to verify trading execution results

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Giaosucan

Giaosucan

I am a full stack developer and IT blogger. Pls see my LinkedIn profile at https://www.linkedin.com/in/giaosucan/