Waters Rankings 2020: Best Market Surveillance Provider—Nasdaq

This year, Nasdaq regains the best market surveillance provider title from 2019 winner S&P Global Market Intelligence. Nasdaq’s Market Surveillance platform—formerly known as Nasdaq Smarts—was recently selected by Tradeweb Markets to monitor trading in US treasuries, mortgage-backed securities and swaps on its session-based Dealerweb platform.

The Members Exchange (MEMX), too, announced that it was integrating the surveillance platform back in March. At the time, the two companies were working to establish connectivity while waiting for the final hardware delivery, which MEMX will host.

The platform is available as a self-hosted solution, deployed, or operated in a firm’s own hardware environment or on a third-party’s cloud. It is also available as a managed service, where Nasdaq handles the hosting and operation via the cloud or via its datacenter. Clients can also opt to deploy the platform via surveillance-as-a-service, with Nasdaq providing the standard architecture, alerting, reporting, and modules. This deployment method entails lower implementation costs and faster time to market, although it also offers less customizability. 

This year, Nasdaq has been updating its surveillance system with new features that can identify spoofing. The new features will allow clients to build trader profiles that can help investigate cases of spoofing or other forms of market manipulation. It combines different data sources to build these profiles, such as a trader’s typical order flow, types of asset classes normally traded, the order-to-trade ratio, and the order cancellation rate. Over the last two years, the company has released two new spoofing alerts and a depth visualization feature, allowing it to create consistent patterns of spoofing activity that Nasdaq’s visualization tool aims to capture.

In January, it launched a data discovery tool within its Trade Surveillance service, enabling compliance teams to develop deeper insight into trading and surveillance activities and extract additional insights and context for market abuse investigations.