Market Surveillance Systems for Exchanges: A Look at the Leading Products

by Anshuman Jaswal, PhD, June 2, 2015
Product Trends/ Reviews
Global

Abstract

Market surveillance systems have become an integral part of the trading marketplace. The impact of the financial crisis, ensuing increase in regulation, and the fallout from benchmark manipulation have meant that most regulators, exchanges, and large trading firms see trading and communications surveillance as necessary to business continuity and not just another cost to bear. 

In the report Market Surveillance Systems for Exchanges: A Look at the Leading Products, Celent analyzes the product offerings of the leading vendors in the market. We are experiencing a change in the way surveillance is conducted within the exchanges and regulators. Having a more comprehensive approach is seen as key to a better trading environment. Modern surveillance systems enable personnel across the firm to undertake different surveillance-related functions simultaneously through the same platform and ensure that there are no anomalies in the trading practices.

The continuing regulatory push for more advanced systems has played an important role in the demand for such systems. The need to improve visualization so that the decision-making processes become simpler for the senior personnel in exchanges and regulators is also crucial. Customization and configurability also requires a great degree of flexibility and ongoing development on part of the vendors. The move toward a more holistic surveillance approach combines other elements of compliance such as best execution with the market surveillance technology. Finally, more elements of machine learning are being incorporated in the current systems, with continuous improvement in the technological capabilities in this regard.

“The deployment requirements of exchanges and regulators are usually more specific than trading participants,” says Dr. Anshuman Jaswal, a senior analyst with Celent’s Securities and Investments practice and author of the report. “Due to the significant requirements, IT capabilities, and resources of these users, in most cases we find that on-site deployment is preferred over a hybrid or cloud solution.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

3

 

Key Research Questions

4

Leading Market Vendors

5

Product Profiles

6

 

Ancoa

6

 

Apama by Software AG

8

 

b-next

9

 

Cinnober Surveillance, Cinteg

10

 

First Derivatives Delta Surveillance

12

 

LSEG Millennium Surveillance

13

 

Nasdaq SMARTS Market Surveillance

14

 

NICE Actimize

15

 

SunGard Protegent Surveillance

16

 

SAS

18

Important Upcoming Developments

20

Conclusion

22

Leveraging Celent’s Expertise

24

 

Support for Financial Institutions

24

 

Support for Vendors

24

Related Celent Research

25

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