Investment bank XYZ Ltd

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Problem:
Investment bank XYZ Ltd needs a trading applications to manage its trading of Equities and Bonds. It
needs to have the ability to book such trades, manage its position (Inventory of securities (eg
Equities and Bonds) and profit & loss (how much money it is making or losing). Initially, the
application will support Equities (Shares eg Tesco, BT) and Bonds (Debt security, similar to IOU)
securities, but the system should be flexible enough to support other Securities type, like
Commodities (Oil, Gold) and Derivatives. This will be a global application used in London, New York
and Tokyo. It needs to be highly available, scalable and flexible. It needs to support high transaction
throughput as well as reporting needs of the business.
Currently, the Bank has several Excel based spreadsheet applications which is being used to manage
its trading business. As trading volumes are increasing, this spreadsheet based application are not
reliable, scalable and are error prone; in terms of data, these spreadsheets have grown over time
and there was no design done. There are large amounts of data duplication and data quality is a big
issue and a couple of people are required just to keep the data consistent (otherwise there could be
big financial losses due to data inconsistencies). In short, the current system is not fit for purpose.
Securities are traded in different markets (like London Stock Exchange (LSE)). It is possible for a given
security to be traded on several exchanges. For example, shares of TESCO are traded in both London
and New York Stock Exchanges (NYSE). Each security will have its own currency. For example, TESCO
can be bought in Great British Pounds on LSE and US Dollar on NYSE, and will be treated as two
different securities. A security can have coupons ( or dividend – annual interest paid) payable at set
date of a specific amount per share and in a set currency. These coupons can be paid several times a
year.
A client will contact the trader (either by phone, secure chat or website) at XYZ Ltd for a trade to be
placed. A trade can be either to buy or sell a security, specific quantity of the security at the market
price. Each trade is done in a particular book; A book is a method of grouping trades for accounting
purposes – a book needs to be specified in a trade.
The book will specify the limit value of it long and short position and currency. A security can be
traded in many books and a book can contain many different securities. Each time a trade is done,
the security position (no of security held (long position, expressed as positive number) or (short
position, expressed as negative number) changes depending on the number securities bought or
sold. At the end of the day, the security position profit & loss is calculated; this tells the Bank
whether they are making money or lost per security and book (you do not have to do the
calculation, but store the value)
For the client, basic contact information is required, like company name, contact persons, phone,
email.
You are required to produce the data model for them. You need to interview the User to ensure you
fully understand the business case.

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