Waters Rankings 2016: Best Market Surveillance Provider — Nasdaq

Nasdaq continues to dominate the market surveillance category with its fourth consecutive victory.

nasdaq-surveillance-watersrankings2016
Vijay Dayalan, Tim Kurkjian, and Mitchel Northrup

There are some categories in the Waters Rankings Awards, and across the respective Sell-Side Technology and Buy-Side Technology Awards, that are dominated year-in, year-out by one system or provider. Nasdaq is one such example: The exchange operator has now taken the best market surveillance provider category for the fourth year running.

As the importance of market surveillance has grown, partially thanks to the increasing need for near real-time and auditable records of trading activities and communication between traders to satisfy compliance and regulatory requirements, so too has the volume of solutions coming to market. In such an environment, a successful platform is founded upon a substantial global reach, and Nasdaq’s Smarts trading and market surveillance platform is one of the most far-reaching available, boasting a presence across 45 marketplaces, 13 regulators and over 100 market participants across 114 venues.

The continued evolution of Smarts has been focused on three key areas: regulatory compliance, market knowledge depth, and keeping its users ahead of the technology curve. 

Nasdaq has spent much of the last 12 months adding new functionality to the platform relating to these three factors, most recently through the extension of its regulatory functionality for the Market Abuse Regulation (MAR), which came into effect at the start of June. While much of the groundwork was already in place, Nasdaq added several new alerts, with a particular perspective on intentions toward insider trading, such as order behaviors, utilizing machine-learning capabilities for false positives, and identifying outlying indicators.

A module for dark pools was also introduced in October last year to monitor for market manipulation and abusive behaviors in “non-lit” trading venues, building out the platform’s over-the-counter (OTC) derivatives coverage alongside new modules for foreign exchange and precious metal markets.

Smarts has also been a keystone platform in some of the exchange operator’s largest implementations over the course of the last year, with several new client wins soon to be announced. In December, the first phase of Nasdaq’s project to overhaul the infrastructure of Borsa Istanbul was completed, with Smarts one of nine systems installed at the Turkish exchange after a two-year development and integration period.

Nasdaq’s Smarts trading and market surveillance platform is one of the most far-reaching available, boasting a presence across 45 marketplaces, 13 regulators and over 100 market participants across 114 venues. The continued evolution of Smarts has been focused on three key areas: regulatory compliance, market knowledge depth, and keeping its users ahead of the technology curve.

The future of Smarts is aimed squarely at holistic surveillance, as user demand grows for more contextualization and holistic perspectives on data, instead of the historic siloed approach. To that end, Nasdaq is working in partnership with other as-yet unnamed specialists to develop a platform that will combine e-communications monitoring and trade surveillance alerts through a single interface, due to launch in the fourth quarter of this year. 

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