Nasdaq Trade Supervision

Recent headlines have publicized various cases of market abuse involving algorithmic and high frequency trading platforms – contributing to public perceptions of disorderly markets, accompanied by high price and volume volatility. As a result of the regulators increasing focus on automated trading systems, it is evident that there is a requirement for market participants to have in place multiple lines of defense.

While, it has traditionally been a back office function, both public perception and increasing regulatory scrutiny on the supervisory function of trading desks across execution platforms and asset classes have placed increased pressure on the front office to enhance their risk and surveillance processes.



Solution



Nasdaq Trade Supervision is a real-time, cross-asset solution that enables the front office at firms to monitor for trading activities which may represent disorderly markets. Its package of alert scenarios contains various rule-based algorithms, which are able to identify trading patterns based on the parameter values tailored to each firm.

The solution offers monitoring across all trading systems and asset classes, with coverage for trading in equities, futures and options and fixed income instruments, as well as FX and OTC trading. Built on Nasdaq’s core surveillance platform, which is proven and in-use at over 145 firms, the Nasdaq Trade Supervision solution leverages over 20 years of combined expertise to visualize real-time dashboards and analytics – providing strong insights into trading activity. Furthermore, the solution improves collaboration between the first and second lines of defense by synchronizing alerts used by the compliance team and the trading desk.


Direct connection from firm’s trading environment to Nasdaq’s hosted environment
Rapid alert delivery – overall latency is dependent and configurable based on customer data setup and delivery on average
Focus is on disorderly trading patterns – looking for signals that an algo is trading abnormally, contrary to trading history, or generating significant price volatility or order flow
Focus is on electronic trading rather than the full spectrum of a firm’s Trader population
Support of all asset-classes (equities, futures and options, fixed income instruments, FX and OTC trading)
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