Following the financial crisis, new laws around the globe required regulators to perform better surveillance on a variety of market activities and financial instruments. Given the fragmentation of markets and complexity of many financial instruments, regulators are looking for ways to better monitor the markets.
To help address its market surveillance needs, the United Kingdom's Financial Conduct Authority (FCA) has gone live with Nasdaq OMX's SMARTS Integrity market surveillance platform to enhance its monitoring of transaction reports across the UK's financial markets.
SMARTS Integrity provides the FCA with a surveillance platform for the detection of market abuse across financial instruments that are traded on regulated or prescribed markets including any underlying derivatives. The FCA is leveraging the Nasdaq OMX platform to enhance its coverage of current and future European legislation such as the Markets in Financial Instruments Regulation (MiFIR) and Market Abuse Regulation (MAR).
[Nasdaq OMX, like many other exchanges and financial services firms, continues to diversify and offer more technology solutions to clients. For a recent enhancement to Nasdaq OMX's technology product suite, read: Nasdaq OMX Now Offers Packet Capture Trading Data Through QView Latency Optics.]
"SMARTS Integrity is being used by a major regulator that is taking leading edge technology to provide integrated surveillance," says Paul McKeown, Vice President, Market Technology, Nasdaq OMX. "If yo look at the breadth of instruments that are covered, [ the FCA] is taking surveillance to new levels."
Regulators also need to find better ways to share information, as regulations are still fragmented by jurisdiction, notes McKeown. "If you look at euro landscape, there is a lot of talk about regulators working together," he says. "Certainly, the cross market transparency is very important and at some point, there may be a common integrated surveillance process for the European markets."
SMARTS Integrity is being used by 12 regulators and numerous exchanges around the globe, McKeown says. The IntercontinentalExchange, or ICE, and BATS, both in the U.S. and in Europe, use SMARTS Integrity. SMARTS surveillance solutions operate in 50 market venues and regulators, and more than 70 market participants across 55 markets, according to Nasdaq OMX.
"We are committed to providing the FCA with the most powerful surveillance technology in the industry to detect market abuse in a constantly changing marketplace," says McKeown, in a press release. "The implementation project went smoothly with all target dates and requirements met. We are very proud of our partnership with the FCA as we continue to grow our footprint in the regulatory environment in Europe and beyond. We look forward to developing this partnership in the future." Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio