Being able to offer buying and selling of equities through various apps and FinTech offerings is gaining in popularity and traditional mutual fund brokers is seeing the need for adding single stocks to their universe of investible assets too.
This article builds upon the article called How to get started with Bricknode as a core banking system for current accounts in 30 minutes
The first order of business is to activate the instrument type for stocks, I will navigate to the marketplace and then find the add-on for stocks.
With this add-on enabled I can go on and add stocks to the system, this can be done automatically from a data feed, via API or manually. Bricknode has a feed for reference data (all the basic information about a stock) and end of day pricing data that can be enabled for a system and then all instruments available on subscribed exchanges will be imported into the system and a daily price feed activated.
For demonstration purposes I will add the stock of Apple manually in this article.
There are some pre-requisites that are needed when adding a stock so that things like order routing and TRS reporting can function properly. One of those things are the setting for primary market. Within the “System Data” section there is a selection called Places.
This is the area where I will register the exchanges where the instruments are listed. I will start off by adding Nasdaq US as a market.
Now I can navigate to the instruments section and select Stocks and then simply click the “Create” button to get a new dialogue for creating a new stock instrument.
The first view will look like this.
As can be seen there is a setting called Issuer where I can register the issuer of the stock if I wish, in this case this would be Apple Inc. and if I want to get the full value of the system I can use this granularity but I do not need to work with issuers to simply offer investing in this stock so I will leave it for now.
On the next screen I define some properties for the instrument.
On the last screen I can enter various categorizations like for example risk groups, industry groups etc. Categorizations are highly configurable but outside the scope of this article.
When I click “Create” the instrument will be created and I will be asked if I want to create an Execution Interface.
An Execution Interface is a trade route, it defines how orders are going to be executed. If I have activated an integration to a broker or bank I will have that as an available Execution Interface with the relevant settings for that trade route.
In this example I will configure the Manual Execution Interface. Before I do this I will set up a new custody account that will mirror the brokerage account that I am using for safekeeping of the stocks that are bought.
Just as in the previous article the custody account is created from the House View.
Bank 1 will be the Legal Entity that will act as a counterparty to all trades as my broker and thus I need to create a Counterparty Account for this Legal Entity too. I do this by navigating to the Company and then I create the new account of the Counterparty Account Type.
Now I can go back and create the Execution Interface.
Finally I will get some historic data for the instrument which I can import via API, files, enter manually or by activating an add-on with end of day data for the instrument, this way I can see a chart and start using historic performance calculations too.
All is now set and as a back-office user I can enter trades on behalf of accounts.
The Financial Advisor with Power Of Attorney for a customer can enter orders too.
And finally the end customer can log on and enter trade orders as well.
Complete order management capabilities are available through our API too for you to build your own customer experiences and automation.
Please get in touch with us to explore your case further!