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A wire room is a room which serves as a hub for sending and transmitting customer orders, notifications about trades, and funds. Banks have wire rooms for handling wire transfers, and these rooms are also found in brokerage houses. Depending on the size of the institution, the room may be staffed by full time staffers who are dedicated to wire duties specifically, or staffers may rotate in and out of the wire room and share responsibilities. In some cases, it may be handled at a desk, rather than a literal room.
Much of the work in the wire room is supported by computer systems. These systems need to be secured because they handle personal financial data, and interference with the system could prove costly. For example, if a hacker changed the terms of orders being sent in and out of the wire room, the wrong orders would be executed on behalf of customers.
In a brokerage house, when a customer places a buy or sell order, it goes through the wire room so that it can be relayed to the trading floor, with a representative of the brokerage house executing the trade as directed. Likewise, executed trades are reported back to the wire room so that they can be logged appropriately. The wire room staff are responsible for confirming that the orders they wire back and forth are correct, and for verifying information which passes through their hands. Usually printouts of activities are generated to create a record which can be used later.
In a bank, the key function of the wire room is to handle wire transfers of funds between accounts. Incoming and outgoing wires are both run through the room. Several companies manufacture standard equipment and software suites which can be used to manage wire transfers, and these packaged products are popular with smaller banks. Larger institutions generally prefer to install custom systems which will allow for greater flexibility and functionality.
Staff who work in a wire room may need some technical training, or they may learn their skills on the job. Because they are trusted with sensitive financial material, they may be required to pass background checks to confirm that they do not have any events in their history which could conflict with their ability to work effectively in the wire room. For example, someone with a history of convictions for financial fraud is probably not the best choice of employee for this type of work.
@allenJo - When I think of the wire room the words that come to my mind are “war room” and I imagine sinister computers like HAL in Space Odyssey or the “Whopper” in War Games which have the power to control important systems that run our world.
Think of how important these systems are. I imagine that a cyber attack into these units could cause a complete collapse of the stock market. I would imagine that there would have to be multiple, redundant systems in place to handle this possibility.
I still can’t grasp the fact that all these traders on the trading floor are actually executing trades on behalf of thousands or even millions of traders.
I understand the concept of computerized trading, the idea that all of my trades can get sent to a computer system in a wire room or wherever.
But the thought of all of those orders going to “live” people down on the floor baffles me. I see pictures on television of guys with pencils and pads and yelling out orders. How anything gets done on the stock exchange floor continues to baffle me; but it does, and for that at least I’m grateful.
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