Paramatrix Technologies Pvt Ltd
Insider trading is a real and eminent issue for listed companies. Also, the government expects companies to track and report such issues. To combat this, Paramatrix Technologies wanted to offer its customers an online tool to track its employees’ trading activities. The company used Windows Azure to create Employee shares Trading Compliance System (ETCS), an online compliance tool to create a deterrent and track any incidents of insider trading. With this, Paramatrix saves 25 to 35 percent in costs in terms of on-premise hardware and licenses, while benefiting from a reliable and secure cloud platform. Also, its customers avoid costly capital expenditures along with the hassle of maintaining an on-premises infrastructure.
Paramatrix Technologies is an IT software development and services company headquartered in Mumbai, India. The company focuses on developing software applications and technology solutions for enterprises and mid-sized businesses. It offers custom application development, system integration, business process outsourcing (BPO), and staff augmentation services.
In 2011, the company began to see an added business opportunity. As per the Securities Exchange Board of India (SEBI), any company that trades in the stock market should have records of their employees’ stock transactions. However, almost 90 percent of the companies did not have a standardized tool to take care of this. “With clients predominantly in the capital market, we realized that there was a need for a compliance tool that would overtake the manual compliance processes,” says Mukesh Thumar, CEO, Paramatrix.
Employees trading in stocks had to take approval from their department heads and the compliance officer. The whole process was manual, where the compliance department used to collect forms from employees interested in trading in stock on a quarterly, half-yearly, or yearly basis. As a result, there was always a possibility of missing information, which could lead to legal consequences by SEBI. Errors mounting from this manual process were an added pain.
“Our goal was to provide these organizations with a solution that would help them to overcome the compliance challenges related to employee trade data management,” says Mukesh Thumar.
Paramatrix recognized that it could meet these challenges and opportunities by using cloud technology. It selected Microsoft’s cloud platform and created Employee shares Trading Compliance System (ETCS), a web based tool designed to automate compliance related to insider trading defined by SEBI. To do so, it used Windows Azure, the Microsoft cloud services development, hosting, and management environment. Windows Azure provides on-demand compute, storage, networking, and content delivery capabilities through Microsoft data centers.
ETCS gives users a dashboard equivalent screen where they can request approval for trading in stocks. The request goes to the department head and from there to the compliance officer for final approval. After this is received, the employee is entitled to trade in the stock market.
An important feature of ETCS is the Restricted Trade List that lists the stocks that cannot be traded. The tool ensures strict compliance to this rule by automatically checking if the stock requested by an employee is listed here. The system automatically disallows the request or rejects it if that is the case, so that the employee cannot trade in that particular stock.
“ETCS completely eliminates the age-old tedious and time consuming process of manually collecting each and every employee’s trading details,” says Mukesh Thumar. “It keeps track of an employee’s complete trade life cycle, right from order request to trade approval, trade request, trade records, and finally, holdings. It helps maintain and retrieve up-to-date records of all employees’ trading details. Also, reports of violations and exceptions are available out of the box.”
The cloud component ensures that the entire data is consolidated in a single database. Currently, the company is using Microsoft SQL Azure for its database requirements.
ETCS is a cross platform (Windows Phone OS, Android OS, Blackberry OS, and iOS) mobile-ready tool supporting order request and approval on the go. The first version of the tool went live in March 2012.
By using Windows Azure to create ETCS, Paramatrix has delivered a high-performance, cost-effective system, while avoiding a high IT management burden and optimizing its market position.
Easier management and quick ROI
Mukesh Thumar says, “If our customers had to locally host this tool, they would require high-end hardware to do so, not to mention the maintenance required. As ETCS is hosted on the cloud, associated maintenance tasks are out of the question. Paramatrix customers are keen to deploy the application as they see a return on this investment.”
With Windows Azure, Paramatrix has the flexibility of increasing commodity hardware as and when required. “For any local application running in-house, we would have to buy new servers if there was an increase in demand,” explains Mukesh Thumar. “However, with Windows Azure, we just need to buy an instance as and when required. This is a unique selling point for our ETCS application.”
With Windows Azure, Paramatrix is able to avoid significant infrastructure costs. Additionally, Paramatrix customers do not have to pay upfront licensing fees or purchase hardware. “With Windows Azure there is no need for a large upfront investment,” says Mukesh Thumar. “We pay for what we use. As a result, we have seen a 25 to 35 percent cost reduction while developing and deploying the solution.”
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