Trading Permissions
Table of Contents
1. Summary
This is a sketch. It names the theme and its dimensions so that neighbouring documents have somewhere to point, and records what already exists. It does not propose a model.
A trading permission is a standing rule about what may be booked. A cable book takes GBP/USD and nothing else; a desk is mandated for vanilla options and not exotics; the firm holds a licence covering some instruments and not others.
The rule is evaluated when a trade is booked, and a booking that breaches it does not become a trade. That is what separates permissions from operational authorisation, which is a decision a person takes about a trade that already exists.
2. How it differs from authorisation
The two are easily conflated, because both answer "is this allowed", and both are operational concerns. They differ in every other respect.
| Trading permission | Operational authorisation | |
|---|---|---|
| What it is | A standing rule | A decision about one trade |
| Set by | Risk, compliance, the desk's mandate | Operations, case by case |
| Evaluated | When the trade is booked | After the trade exists |
| Scope | A class of activity | A single trade |
| On failure | The booking is refused | The trade sits unauthorised |
| Changes | Rarely, by a deliberate act | Per trade, continuously |
A permission that is absent stops a trade coming into existence. An authorisation that is absent leaves a trade in the book contributing to nothing, which the trade lifecycle covers.
3. The dimensions
Three questions, and a permission constrains some combination of them.
3.1. What may be traded
- A product type, from the catalogue in ORE Products by Asset Class.
- A product family or an asset class, where the mandate is coarser than a single product: vanilla options but not exotics, rates but not credit. Product family and asset classes supply those classifications.
- A specific underlying or currency pair: GBP/USD on a cable book.
- A counterparty, where the firm is not permitted to face one at all.
3.2. Where it may be booked
- A book, which is the finest and most common grain.
- A desk or business unit, inherited by the books beneath it.
- A legal entity, where a licence or a local regulation binds one entity of the group and not another.
- The firm, where the constraint is universal.
The levels compose, and the narrowest applies. A book cannot widen what its entity permits.
3.3. Who is driving it
A permission is usually not Operations' own rule, even though Operations enforces it.
| Source | Typical constraint |
|---|---|
| Risk | Exposure to an asset class or underlying |
| Compliance | Restricted lists, Chinese walls between desks |
| Licensing | Instruments the entity is authorised to deal in |
| The desk's mandate | What this desk exists to trade |
Recording which of these a permission comes from matters, because it determines who may change it and what evidence a change requires.
4. What already exists
Two pieces of this are modelled.
Book currencies holds the allowed-currency set that constrains what may be booked into a book, which is the currency dimension at book grain.
Book access and permissions holds the fine-grained model by which books are permissioned and users grouped, including Chinese walls between desks. That is access control — who may see and act on a book — rather than a constraint on what the book may hold, and the two are worth distinguishing even though they share the word.
Neither covers product type, product family, asset class or underlying, and nothing holds a firm-wide or entity-wide constraint.
5. Open questions
- Whether a permission is a rule evaluated at booking or a pre-computed set a book carries. The second answers "what may I book here" without evaluation, at the cost of recomputing on every change.
- Whether a breach is always a refusal, or whether some permissions produce a warning and a trade requiring escalation instead.
- How a permission is evidenced when a regulator asks, given the source matters as much as the rule.
- Whether a permission is reference data on the product type and counterparty, or an entity in its own right with its own lifecycle. Operational authorisation raises the same question from its side.
6. Sources
The theme is drawn from the internal analysis notes on authorisation, which record standing permissions alongside per-trade decisions without separating them. No external standard is cited.
7. See also
- Operational Authorisation — the per-trade decision this is not.
- Book access and permissions — who may act on a book.
- Book Currencies — the currency dimension, at book grain.
- Book — the hub for the book cluster.
- Knowledge — the hub of all knowledge notes.