Let's break down the flow of an online discount broking platform in India, covering RMS, Frontend, order execution, clearing, DP, and data integrations.

High-Level Flow

1. Customer Interaction (Frontend):
   • The customer uses a web or mobile application (the "Frontend") to interact with the broker.
   • They log in, view market data, analyze charts, and place orders.
2. Risk Management System (RMS):
   • Before an order is sent to the exchange, the RMS checks if the customer has sufficient funds or margin to place the order.
   • It also monitors the customer's positions in real-time to prevent excessive risk-taking.
3. Order Routing:
   • If the RMS approves the order, it's routed to the exchange (NSE/BSE) via the broker's trading system.
4. Exchange Matching:
   • The exchange's matching engine finds a counterparty for the order.
5. Trade Confirmation:
   • Once the trade is executed, the exchange sends a confirmation to the broker.
   • The broker updates the customer's account and displays the trade confirmation on the Frontend.
6. Clearing and Settlement:
   • The clearing corporation (e.g., NSE Clearing) steps in to guarantee the trade.
   • On T+1 day (or T+2, depending on the security), funds and securities are exchanged between the buyer and seller through the clearing corporation.
7. Depository (DP):
   • The Depository Participant (DP) is the interface between the investor and the depository (e.g., CDSL or NSDL).
   • Securities are held in dematerialized form in the investor's demat account with the DP.
   • On settlement day, the DP debits/credits the securities from/to the investor's demat account.

Detailed Breakdown

1. Frontend (User Interface)

• Purpose: The customer-facing application (web or mobile) for trading, account management, and information access.
• Key Features:
  • Login/Registration
  • Market Watch (real-time quotes, charts)
  • Order Placement (buy/sell, order types, quantity, price)
  • Portfolio Tracking (holdings, P&L)
  • Fund Management (add/withdraw funds)
  • Reports (trade history, statements)
  • Customer Support

2. Risk Management System (RMS)

• Purpose: To control and mitigate the risks associated with trading. It's the broker's first line of defense against client defaults and market volatility.
• Key Functions:
  • Margin Calculation: Calculates the margin required for each trade based on exchange rules, volatility, and the broker's own policies.
  • Exposure Limits: Sets limits on the maximum exposure a client can take based on their available funds and risk profile.
  • Real-time Monitoring: Continuously monitors client positions and margin levels.
  • Auto Square-Off: Automatically squares off positions if margin levels fall below a certain threshold to prevent losses.
  • Order Blocking: Blocks orders that would violate margin requirements or exposure limits.
• Integration: The RMS is tightly integrated with the Frontend, the order management system (OMS), and the clearing system.

3. Order Management System (OMS)

• Purpose: To efficiently route orders to the exchange and manage their lifecycle.
• Key Functions:
  • Order Routing: Routes orders to the appropriate exchange (NSE/BSE) based on the security and order type.
  • Order Tracking: Tracks the status of each order (pending, executed, rejected, cancelled).
  • Order Modification/Cancellation: Allows clients to modify or cancel pending orders.
  • Trade Confirmation: Receives trade confirmations from the exchange and updates the client's account.