Derek Haworth

[Chicago, Illinois] — BornTec, a leading provider of data management solutions and tools for financial markets, today announced that Advantage Futures (Advantage), a high volume Chicago based futures commission merchant with global reach, has selected the company’s CrossCheck Audit Trail module to strengthen its enterprise compliance program. The deployment is expected to facilitate compliance and support conformance with exchange and regulatory audit trail mandates.

The Audit Trail module automates the validation, structuring, and storage of audit trail data, ensuring firms remain compliant while reducing operational overhead.

“Our priority was to enhance the management of our audit trail requirements while simultaneously reducing manual work for our team,” said Joe Guinan, Chairman and Chief Executive Officer at Advantage. “The CrossCheck Audit Trail module provides a single record source which is easy to access and cost-effective to maintain.”

“Organizations are under pressure to manage regulatory requirements and improve operational standards,” said Derek Haworth, Chief Executive Officer at BornTec. “We’re excited to partner with Advantage to deliver measurable outcomes: reduced manual work, improved audit readiness, and stronger resilience.”

About BornTec

BornTec is a leading provider of data management and software solutions for the financial industry. Our CrossCheck platform provides centralized data aggregation and tools that simplify trading operations, surveillance, audit, and compliance by unlocking the value of consolidated data for banks, brokers, FCMs, trading firms, and more. Learn more at borntec.com.

About Advantage Futures
Advantage ranks among the highest-volume futures brokers, processing 434 million contracts in 2025 from a diverse client base domiciled in 43 countries, territories, and jurisdictions worldwide. Advantage provides access to 25 futures exchanges around the world while operating an agency-model brokerage and not speculatively trading for its own account; avoiding any conflict of interest by not competing with client trading. Advantage also provides technology-related services for clients, including server hosting. For more information visit advantagefutures.com.

Continuing their tradition of market leadership, the Futures Industry Association (FIA) recently updated the white paper “Best Practices for Automated Trading Risk Control System Safeguards.” The white paper covers everything from pre-trade controls to post-trade analysis as they relate to automated trading and the FIA aptly points out that ALL market participants – exchanges, trading firms, brokers, clearing firms, and third-party service providers – have a role to play in ensuring that the highest standards are adopted and followed.

As a provider of a global trade aggregation platform, BornTec plays a key role in helping to address and manage some of the risks associated with automated trading. After a number of conversations with our customers about the role of third-party solutions like BornTec as it relates to the content of the white paper, three comments that came up time and again were “early warnings,” “adding another layer,” and “a better way.” These phrases describe how firms like BornTec are uniquely positioned to provide solutions that span the full universe of operational risk as it relates to automated trading and beyond.

Automated Trading Solutions: The Customer Perspective

In the complex web of interrelationships in the derivatives trading industry, third-party vendors are well positioned to deliver solutions that no other single industry participant can provide on their own. Our customers tell us that these solutions fall broadly into one of three categories: early warnings, adding another layer, and a better way. Here are examples of all three:

Early warnings

Every market participant knows that it is better to anticipate or head off an issue before it reaches a critical stage and a software vendor like BornTec is often ideally positioned to do just that. A case in point is with exchange message programs and message throttles, sections 3.3 and 3.4 respectively in the white paper. In both cases, a software solution is an excellent tool for monitoring activity to detect when message rates are climbing or limits are close to being breached, potentially identifying an issue before it becomes a problem.

Adding another layer

Markets are complex, with many moving parts, and adding additional views and checks can be a big help in unpacking complexity and monitoring activity. Two examples where a software provider can assist with automated trading are self match prevention and maximum order size. In the first case, software can provide monitoring across all execution platforms and in the latter it provides a view into limits that are in place across all systems. In both cases, the software solution offers a comprehensive view that no single provider, participant, or solution can deliver.

A better way

In some cases, a software solution is the best option, even when there are alternatives offered by other market participants.

For example, the white paper suggests that repeated automated execution limits should be set at the trader level but not with the broker or exchange. While there are valid reasons for doing so, the broker as well as exchanges have a role to play in monitoring disruptive activity and the real-time market surveillance functionality in CrossCheck can deliver in this regard without disrupting normal trading activity.

Another example applies to intraday position limits. While setting a maximum intraday position may work well at the trader level, doing so at the broker or exchange is both impractical and imprudent. However, in CrossCheck it is possible to simultaneously monitor intraday position limits across all systems, including ISVs and DMA, giving the only truly comprehensive picture of these limits.

Working Together Toward Market Excellence

The futures industry has always benefited from an approach to regulation and market management that is principles-based and the FIA continues that tradition with the AT white paper. While we agree with the FIA that the best practices outlined are the right direction for the industry, there are better alternatives in some cases and participants should first focus on a foundational element: ensuring that order and transaction flow data is captured in one place that is both reliable and accessible. Taking this approach will simplify the lift of implementing these practices and adapting to future controls.

With the FIA taking the lead, the futures and derivatives industry has a steward who continues to drive healthy market conditions that will benefit all participants. And while it may seem that many of the issues in the AT white paper have been debated for a quarter of a century, the truth is that the nature of market best practices will always be informed by what came before and that much is to be gained by taking a holistic and comprehensive view. BornTec looks forward to being a partner that contributes to the continued health and growth of the industry.

When it comes to trade associations, few fields are as well served as the futures industry is with the Futures Industry Association (FIA). Outcomes-focused, professional, and relentlessly innovative, the FIA doesn’t kowtow to the biggest exchanges or banks (generally, anyways) and maintains a strong international presence that is backed by their consistent integrity. These qualities were on display as they hosted a Washington Outlook panel in Chicago. 

Led by FIA President Walt Lukken and featuring Jimmy Ryan of Avoq and Kyle Glenn, head of Government Relations for the FIA, the conversation focused in large part on the upcoming U.S. elections, but the most valuable portion of the event, besides the opportunity to network with our industry peers, was Lukken’s opening remarks.

Lead with the Chicago Fire

Lukken began his remarks by noting that it was 173 years ago that the Great Chicago Fire occurred, killing approximately 300 people and wiping out nearly all of Chicago’s downtown. Legend had it that the fire was begun by a cow owned by Mrs. O’Leary, a myth long since debunked, and Lukken compared the blame placed erroneously on the cow and Mrs. O’Leary to the way that the futures industry has often been incorrectly labeled as the source of market disruptions like the 1987 crash or 2008 financial meltdown. Both the cow and the futures industry have been victims of a bad rap.

From there, Lukken broke his remarks down into three areas: pillars, challenges, and mentions.

Within pillars, Lukken touched on growth, competition and modernization. 

• This is the 7th year running that the industry has experienced record growth, and while an explosion of retail business in India and elsewhere accounts for part of that, the broad based growth can be marked down to the benefits of standardization, accessibility, and ability to hedge risk. 
• Competition is also strong, sometimes in long established product areas like interest rates with the launch of FMX or energy markets, but also with the renewed interest in establishing new FCMs.
• Modernization is displayed in a collective effort to address long-standing inadequacies in the middle and back office, with both standards setting efforts by DMIST and tokenization being examples of how technology is driving positive change.

As for challenges, the three areas mentioned were cost, geopolitics, and disruptive technology.

• In short, the cost of clearing is expensive and it’s getting even more so. Not only is it expensive to scale but capital costs may be rising as well. (More on that later.)
• It should go without saying that elections as well as conflicts in both Ukraine and the Middle East that could explode into bigger wars are potentially destabilizing. While the futures industry is well built to withstand shocks, the effect of large shocks is hard to predict.
• Technology is enabling new hybrid forms of business but just because it is possible to do something doesn’t mean that it’s necessarily a good idea. Case in point is the collapsing of multiple functions like clearing, trading, and risk management into one legal entity can be problematic, as FTX showed us.

Finally, for mentions, Lukken talked about bank capital, Treasury clearing, and DMIST.  

• Bank capital will hopefully be a disaster averted. The initial version of the so-called “Basel End Game” capital proposal included requirements that amounted to a punitive tax on clearing when the stated goals of financial reform have been to encourage it. Hopefully, the regulators have recognized the errors of their ways and the final rules will be more logical.
• Big changes are coming to Treasury clearing and both SEC Chairman Gary Gensler and Treasury Secretary Janet Yellen have wisely subscribed to a new model that emulates the best features of the futures model. Changes to the functioning of this market are likely to be profound.
• DMIST is a pan-industry standards setting group that has been tackling some of the most stubborn, intractable issues facing the futures industry. After beginning with give-ups and average pricing, DMIST will continue to bring together the diverse elements of the industry to address challenges that are universal to all participants and, in the process, promote further stability and growth.

And the winner of the 2024 U.S. elections will be…

Fortunately, Lukken, Ryan, and Glenn didn’t go there. However, their thoughtful comments and insights highlighted yet again how the FIA is an important conduit for ideas and dialogue that benefits everyone in the futures trading industry. In that sense, we all win.

Twelve hundred attendees, twenty countries represented, and three days of meetings: that sums up FIA Boca by the numbers. But what were the big topics of discussion and emerging trends that are shaping the industry? The BornTec team has a few ideas to share from conversations we had with customers and prospects at the futures trading industry’s biggest event of the year.

Growing Volume and Regulations, Shrinking Resources

From 10,000 feet, the futures industry has it very good but from ground level, there are a number of challenges to deal with. Volumes are strong, driven both by a surge in shorter-term options and micro-sized contracts as well as rising interest rates and general economic uncertainty. At the same time, regulatory mandates from governments and exchanges alike paired with constrained budgets and two recent technical disruptions – one a year ago and the other in January of this year –  mean that firms must be creative as they strive for flexibility and resilience.

Cloud Has the Numbers but Operational Resilience Has Everyone’s Attention

FIA Boca witnessed unprecedented levels of sponsorship and participation from the big, cloud hyperscalers with AWS, Google Cloud and Microsoft Azure all showing up in force. However, the number one topic of conversation with colleagues, customers and prospects was the need for improved operational resilience. Recent events have made clear that system outages can arise for any reason, not just the increased threats from ransomware and other cyber challenges. In all, this elevates the importance of resilience planning and vendor management. 

Everyone is Talking About AI but Few are Asking for It

AI was the topic of discussion on several panels but down in the trenches (or, in this case, the Palm Court) managers and their teams are not asking for AI to address their challenges, they only want pragmatic solutions that unite their disparate data and systems. AI shows great promise and will most likely become more embedded in processes but, for right now, the emphasis is on making the most of what they have in the least disruptive ways possible.

The View from BornTec

FIA Boca is a fantastic opportunity to meet with the most important players in the futures and derivatives trading industries and the blend of business and ideas is both enlightening and productive. Overall, the industry is dynamic and growing but there are a number of challenges that must be met. By virtue of our deep industry experience and focus on maximizing data to increase data transparency, improve operational resilience, enhance risk management and improve speed to insight, BornTec is excited to build on top of success as we partner with our clients to deliver outstanding outcomes. Contact us to learn more.

One year ago, the futures industry was well on the way to re-establishing normal operating procedures after a major ransomware event that targeted the critically important and deeply embedded services offered by ION Markets. In the aftermath, the Futures Industry Association (FIA) has taken a proactive path to address the issue of market resilience but on the ground, some very valuable lessons are already being implemented where operational resilience is concerned. As we talk to customers and prospects we have found three key themes that should be addressed before the next market disruption hits: data, agility, and communication.

What To Do NOW to Prepare for Market Disruption

In the past, cybersecurity was approached primarily with a “deep moat / high wall” mentality but the evolution of markets has made such an approach outmoded at best and dangerous at worst. At the same time, in an environment where shrinking budgets and cost compression are a given, it is not possible to install duplicate systems at 2.0x or even 1.5x the existing cost. New approaches are called for.

In this environment, the complex interconnectedness between customers, firms, exchanges, vendors and others calls for an approach that pivots from defense to one that focuses on operational resilience. And while regulators and industry groups have yet to publish definitive rules and regulations regarding resilience requirements, savvy companies are already making changes both because they will almost certainly be required soon and, perhaps most importantly, because they can have a positive impact on performance almost immediately.

Following last year’s ransomware event, several items stand out from our own experience as well as our conversations with both customers and prospects:

• Know your data: A ransomware event or other technology-based disruption boils down to one thing: a disruption in the normal flow of data. Losing a key source of data or data management can throw a wrench into normal processes. In order to be prepared it is imperative to know where data is coming from, what systems play which roles, how they are interconnected internally or with other parties, and where the business rules reside. With preparation, it is possible to access most, if not all, data even if a key link in the chain of operations is impacted. 
• Emphasize flexibility:  Behind the shift from defense to resilience is a key tenet: “keep the lights on” as much as possible.  In the future, regulators will be evaluating how well firms were able to maintain core, foundational operations and restore functionality in line with their resilience plan. When last year’s ransomware event occurred, our team at BornTec was able to work quickly with our clients to craft some novel solutions and one lesson that emerged was that having one-click access to data enabled teams to craft the solutions/create the outcomes that were needed.
• Keep communication flowing: One problem with cyber disruptions is that the next one is rarely like the last one, making it impossible to know with complete certainty how operations will be impacted. With that in mind, it makes sense to take the time to examine your operation and identify the key interdependencies and handoffs that exist and then make certain that those areas have all of the relevant information and contacts that they’ll need when an event happens. It’s a good idea to make this a living document with regular updates and even practice drills. 

It’s Still a Matter of “When, not “If”

Prior to the ION Markets ransomware event last year, industry experts had long said that it was only a matter of time before a major cyber event hit financial markets. While that event proved the experts correct, those same voices are still singing the same refrain: it can, and likely will, happen again.

If that’s the case, then it stands to reason that the issues that were revealed in the 2023 ransomware incident are as relevant now as they were then. Markets are continually increasing in complexity and interdependencies are ever expanding. The reality is that resilience is the key to handling whatever comes next, and BornTec can help with improving operational resilience.