Trading System: How To Handle Chicken-Egg Situation?

[(PeteCresswell)]

I'm about to start writing a small-ish bond trading system.

Some years ago, I wrote a much trading system, but this one has a
new wrinkle: the securities master file/tables will reside
somewhere else. Call it "The Master Repository".

I will just be a consumer of The Master Repository - unable to
add/change/delete any information.

My system will mainly contain trades - each of which will refer
to a security in The Master Repository.

The chicken-and-egg conundrum comes when one of my guys has to
buy a bond that's not yet in The Master Repository.

As the last step in processing a "Buy" trade, we will generate a
trade ticket or a .CSV or whatever... that goes to the Fund
Accounting group - which duly sets up the security in question in
The Master Repository if it is not already there.

But meanwhile, I've got to create this temporary security - since
I have to link the trade to *something*.... or do I?

Anybody been here? Is there a commonly-accepted practice?

 

[david]

Accepted practice is to either let guys take responsibility for
their own back office, or not let guys buy 'new' securities.
If they don't understand the contract well enough to define
it, what are they doing trading it?

"New" securities to be approved by someone else first.
Else what is the point, what is the meaning of not letting your
guys add new security types to the table?

You can have a dummy security type in your table for
unapproved trade types. That solves the database problem.

But that doesn't get around the fundamental managment
problem.

Any retail business manager should tell you: you can't let
the guy handling the trades also define the product.

If you are too small for this business rule, you should shape
your database application around the business rules that you
do have. New trades have to be either fully entered, or not
entered at all.

If your back office can't enter new trade types into the system
fast enough to satisfy your traders, what hope are they going
to have of keeping up with trades after it's too late? Either way,
you're going to have a stack of under-documented trades sitting
on the desk, just waiting for the next Nick Leeson to exploit.

Linking to a dummy type was accepted practice back when I
started out.

Accepted wisdom now is that it indicates a failure of thinking.

Look, normally I don't pass moral judgements on questions people
ask here. I'm sorry.

(david)