Sell-Side Technology Awards 2024: Best sell-side market surveillance product—Nasdaq

Overview

Nasdaq Surveillance is designed to provide market participants, exchanges and regulators with global cross-market, multi-asset, multi-venue trade surveillance and market risk solutions/functionality. The suite allows users to maintain fair markets by accurately monitoring and identifying market abuse behavior.

The solution  

Nasdaq Surveillance:

• Sources, captures, and maintains all trading and market data for user-firms
• Translates complex regulatory guidelines into pre-configured alerts that detect various patterns of market abuse
• Makes analyzing and managing alert and data output more efficient, enabling users to demonstrate (to regulators) that alerts are properly managed for case-building
• Applies new approaches and technology to complex surveillance scenarios to drive efficiency in how alerts are escalated

Secret sauce  

Nasdaq Surveillance:

• Provides direct connectivity to more than 200 markets for sourcing customer and market data. It covers all asset classes, including over-the-counter (OTC) instruments and crypto, and features full order book visualization and market-replay capabilities
• Features over 300 preconfigured alerts covering market abuse scenarios and addresses guidance from regulatory authorities, including the Market Abuse Regulation and Mifid II
• Provides a whole-of-market view of customer trading against the context of the market (spread) and visualizes order-book depth

Recent milestones

• Alert expansion: Launched new alerts for the detection of pump-and-dump schemes and derivative spoofing
• Calibration tooling: Redesigned its end-to-end calibration tool, from editing the proposed threshold setting to reviewing the results
• Evidence cards: Consolidates evidence required for investigations, allowing customization and ensuring data consistency
• AI journey: Launched initiatives with clients and partnered with AWS around false-positive reduction analysis, anomaly detection, and investigation support

Future objectives

• Expanding coverage: Integrating Brokertec into market coverage enabling monitoring of treasury trading
• Related instruments: Detecting potential market abuse across disparate instruments with non-contractual links between them
• AI: Adding GenAI Copilot to provide additional information in alert investigations and expanding the data infrastructure for easier integration of machine learning (ML) capabilities for anomaly detection
• Participant risk analyzer: Utilizing ML to identify participants behaving anomalously based on pre-defined features compared with their market peers or normal behavior

Why they won

Nasdaq follows up its win in this category in last year’s SST Awards by winning it again, thanks to its outstanding Nasdaq Surveillance Solutions suite. Readers will be familiar with the exchange operator’s hugely successful Smarts offering, which has ruled the market surveillance roost for the best part of a decade. Nasdaq has built on that legacy by providing the sell side with what can best be described as the all-singing, all-dancing market surveillance platform that not only takes care of individual firms’ surveillance needs, but those of exchanges and regulators, too.