Developing Discount Brokerage Application?

Question

I'm looking for information on how brokerages work. I need information on thier systems, processes, architecture, etc. Do we have company who sell discount broekrage software out ther or all the brokerage houses developed their applications?

Answer 1

Where to start, where to start? Take a look at a web site like eTrade for an on line or Merrill Lynch for a brick and mortar brokerage house. The rules and regulations that have to be complied with, trading, clearance, treasury, credit and operational aspects of the business are humongous. You can't pick up a package and go into business. You'd need huge expenditure at the least (to say nothing of your time commitment). Firms like the above, as well as others like Lehman, Goldman, JP Morgan etc. have IT departments with thousands of employees.

Answer 2

The answer is mixed, there are companies that market systems software and there are firms that produce their own, though they usually sell their services in turn to others.

The architecture, as a practical matter, must be adaptive to regulatory and legal changes at every level. The primary idea is "robust, safe and secure." These are highly modular applications, but are not predefined, except in the sense that certain standards must be met.

The specific question you are asking would require firms to reveal trade secrets and that isn't going to happen. If you are looking for firms that sell software to discount brokerages because you are in formation as a brokerage firm, I suggest contacting the NASD while your regulatory application is pending.

Because of the type of question you are asking, I can tell you are not a registered principal somewhere. I had a class develop a mock brokerage system for a simulation and that was difficult enough. Meeting regulatory and legal requirements on top of practical requirements in real time, while safe, secure and modular is very difficult. Just maintaining real time quotes as a market maker is a remarkable feat with the SOES out there.


And none of that includes the accounting process for the firm as a business.

There are firms that sell the applications, but if you are considering forming a firm, I suggest speaking with the appropriate regulatory officials while your application is pending. If you are a software development firm, skip it, it is a closed market. You really need tons of practical experience, tons of lawyers, former registered principals, compliance staff, documentation specialists and you need to find the best database team you can find. All of that is prohibitively expensive if you are already not doing it.

Answer 3

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Answer 4

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