Case Studies

Correspondent Clearing


A top non-bank FCM engaged PhillipCapital for omnibus-level correspondent clearing of Asian markets – specifically BURSA, SGX, TFEX and TOCOM. They chose PhillipCapital due to our extensive clearing memberships in the Asian region and our ability to customize according to their needs.


Working with CQG, we were able to create customized order routes for these exchanges that were mapped directly to the client’s CAST environment. This solution provided PhillipCapital omnibus-level risk management that is seamless to the client, while they are able to directly manage access to these markets for their end-users. On the clearing side, PhillipCapital was able to provide the client customized files that included the client’s clearing account number to allocate their specific trades to the right customer. The client uploads the file into their back office system and the trades are able to seamlessly flow thru their environment.

Hedgers


A large multinational commercial food processing company’s hedging department chose PhillipCapital through one of our IB’s for clearing agricultural products. One of the reasons the IB brought the company to PhillipCapital was our strong financial standing and longevity in the business (40 years.) PhillipCapital had to also go through the commercial food processing company’s credit reviews before being approved to be their clearer.


To service this type of institutional client PhillipCapital opened several sub accounts rolling all of the sub accounts into their main account for margining. We provide them with a sweep of their account every night and margin settlement the next morning. PhillipCapital provided them with customized preliminary trade reports several times a day to assist in their hedging. In addition to these customized services we offered them an extremely competitive rate.

Facilities Management


A foreign futures firm wanted to establish a U.S. presence and applied for clearing membership at a local exchange. Through our existing relationships, we approached them with a proposal offering facilities management since we have our own proprietary back office software that manages multicurrency. The services we agreed to provide include:


  • Money and position balancing to exchanges
  • Trade break reconciliation
  • Settlements
  • Trade processing
  • IT support
  • Option expiration
  • Bulk transfers
  • Generation of client statements and reports – ability to report multi assets on one statement

In addition to providing them with the ability to use our back office system, we also helped them with the various steps that go into establishing a U.S. FCM, including initial compliance support, IT setup and back office training. After about six months of working together, the firm started clearing their own trades.

Direct Market Access (DMA) Support and Onboarding


A hedge fund with no futures experience reached out to us for CME clearing assistance. They chose PhillipCapital due to our direct clearing memberships with CME and because they would like to trade directly into Asian exchanges in the future. They had passed conformance testing directly with the CME and were in the process of establishing direct connectivity with the CME. Per the industry-accepted best practices for the management of DMA clients, PhillipCapital instituted a two-step risk management solution:


  • PhillipCapital created a unique CME executing firm id to facilitate Globex Credit Controls and kill switch access only for this client.
  • The client provided PhillipCapital separate, unique access to their internal risk management platform.

With these two solutions in hand, PhillipCapital was able to create customized procedures specific to this client that were incorporated into the daily procedures for both sides. Once the client was on board PhillipCapital provided assistance navigating the CME regulatory requirements as they pertain to DMA clientele, including applicable CME rules and advisory notices.


We conducted extensive testing together with the customer which included adding a trade and removing it, changing limits and ensured that the kill switch worked before approving the customer for live trading.


We continue to assist them in the testing of their risk management system which limits their traders to certain products and position limits.

Introducing Broker


A well-established retail focused independent introducing broker that offers many popular trading platforms at a highly discounted commission rate chose PhillipCapital to clear their customers’ trades. They chose PhillipCapital due to our strong financial stability, strong Asian presence, and IT expertise.


In order to become their clearer, we were required to ensure that new accounts could be processed and opened within half a day, so we worked internally to automate several aspects of our application process and made improvements to our online application. We also worked closely with their internal new accounts and operations department to improve our account opening process. PhillipCapital customized an online application to work with their current systems and procedures. In addition, PhillipCapital now provides the firm specialized customized daily reports for their IT department. The customized reports extended to their IT department and finance departments as well as integrating into their CRM system providing a seamless interface to the current sales team to keep track of the status of their leads.