Rule Engines are software systems specifically designed to execute business logic or conditional statements based on a defined set of rules. Their purpose is to automate decision-making processes, enforce compliance mandates, and implement complex operational policies within financial systems, including those used for algorithmic trading and counterparty eligibility in crypto.
Mechanism
The core mechanism comprises three principal components: a rule base containing the declarative logic, a working memory holding current data, and an inference engine that evaluates the rules against the data. The inference engine processes conditions, triggering specified actions when rule criteria are satisfied. This architecture supports dynamic rule updates and complex logic trees without requiring direct code modifications.
Methodology
The strategic approach leverages rule engines to achieve agility in adapting to changing market conditions or evolving regulatory requirements by externalizing business logic from application code. It ensures consistent application of policies across disparate systems and workflows. This methodology promotes transparency and auditability of automated decisions by providing a clear, declarative representation of operational rules.
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