Risk Management Backoffice

Backoffice system to support Trading Limit and Day Trading Features.

Waiting Approval

Collateral Management

Client Management

Working Capital

Soft and Hard Limit

Panic Button

Panic Button is an emergency feature that allows us to halt ongoing forced selling processes and maintenance ratio calculations.

When activated, the Panic Button will:

Maintenance Ratio: Risk Engine will pause all calculations and prevent any new maintenance ratio calculations from being triggered.
Forced Selling: Risk Engine will stop all ongoing forced selling processes and block any new triggers that could initiate new forced selling processes.
Account Suspension: Suspended accounts will remain in their suspended status; no changes will be applied.

Additional Notes

While activated, Carina will continue sending forced sell trigger details to the Risk Engine. These details will be saved for later processing.
Carina will not be informed by the Risk Engine when the Panic Button is activated; Carina will continue sending forced sell trigger details regardless.

When deactivated:

Maintenance Ratio: Risk Engine will resume calculations, if triggered by new events.
Forced Selling:
- For accounts that had forced selling stopped midway: Risk Engine will restart the whole forced selling process from the beginning, starting with asset ranking and taking into account the remaining outstanding debt, considering these as new requests.
- For accounts where forced selling had not yet been initiated: Risk Engine will process all saved data from Carina, treating them as new T+4 events for forced selling decisions.
Account Suspension: Suspended accounts will remain in their suspended status; no changes will be applied.

Additional Notes

If the Panic Button is activated for an extended period, manual forced selling by Dealer and manual suspension removal by Risk Management ops may be required.
When choosing to 'Deactivate', RM ops team will have the option to either resume the forced selling process or simply turn off the Panic Button without resuming forced selling.

Collateral Management

While we initially planned to accept various assets as collateral, including FR Bonds, IDX-traded stocks, Mutual Funds, and SBN Ritel, we're currently only considering IDX-traded stocks. Please note this decision may be subject to future change.

Value at Risk (VaR)

VaR = Standard Deviation * Z-Score

Standard Deviation: We will use the population standard deviation for our calculations. Essentially, we're not focusing on the last price of the stock, but rather its daily return. Daily Return = (Close today / Close yesterday) - 1
Z-Score: To be conservative at the outset, we will be using a 99% confidence level. For the purposes of our calculations, the Z-score, such as 2.33 for a 99% confidence level, should be used as is without any rounding up or down.

Haircut Formula: Volatility * Liquidity

Volatility is measured using Value at Risk (VaR), specifically the Variance-Covariance Method
Liquidity is measured using both Average Daily Volume (ADV) and Market Capitalization
The haircut percentage will always be rounded up to the nearest whole number, and there will not be any decimal points involved in the output

Note: A lower haircut signifies that the asset is considered less risky, more liquid, or more stable in price. This lower risk profile implies that the asset poses less of a threat to us, the brokerage, permitting higher lending values.

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Log Data

Client Management

Interest Rate

Interest starts from T+3
Interest accrues daily, inclusive of holidays.
Interest for the next day is accrued if payment is made after the cut-off time (15:00).
Interest is based on principal debt at the daily cut-off time of 15:00.
Interest is generated on the system at ???
Debt Repayment Cut-off Time: 11:00 (24-hour format). A set time daily when interest calculations are determined.
Forced Sell Cut-off Time: 11:00 (24-hours format). Forced selling process initiated.

T+2 deposit jam 14:30 = tidak ada bunga

T+2 deposit jam 15:30 = kena bunga untuk ke esokan hari

Bunga di charge jam 5-6 Sore (SAS, proses block settle dan cash ledger) - Front office pas initial data next day

Credit Limit

Credit Limit is the maximum amount of credit a user can utilize. Every user starts with a default credit limit of IDR 100 million. This default value is subject to change (configurable).

Edit Data

Log Data

Forced Sell

Key Triggers for Forced Selling Initiation

T+4 Outstanding Debt: The forced selling process commences at 11 AM for T+4 (business days) outstanding debt.
Stop Out Level: Forced selling can be initiated at any time if the Stop Out Level is triggered. (Out of MVP Scope)

Timing and Scope

Order of Asset Selling: Stocks are sold first until no more stocks can be sold for any reason, then the system moves to selling bonds.
Assets Ranking: Both stocks and bonds ranking should be done at the same time at the beginning of the force selling process.
Limited Data Assets: For assets with limited trading data, such as newly listed stocks or bonds, the available data should be used for the ranking method.