The Investment Industry Regulatory Organization of Canada
(IIROC) has reached an agreement with Nasdaq’s SMARTS platform. Under the arrangement, the regulator expects to significantly enhance its market surveillance capabilities.
As a result of an extensive and thorough vendor selection process, SMARTS has been chosen to provide its leading-edge surveillance technology for the oversight of securities trading on Canada’s debt and equity markets.
“These enhancements will enable IIROC to more effectively detect and respond to potential market abuses across debt and equity markets,” said IIROC CEO Andrew Kriegler. “This system will also strengthen IIROC’s analytical capabilities so we can identify and respond to emerging market trends in an efficient manner.”
The system is able to monitor up to a billion transactions daily in real time. That capability will allow cross-asset surveillance and investigations, as well as quicker detection of trading anomalies across multiple products and dealer firms. New asset classes can also be accommodated as financial products and markets evolve.
“This state-of-the-art system offers new tools and approaches including machine learning and artificial intelligence that our team will leverage to more efficiently monitor for abusive behaviour,” said Victoria Pinnington, senior vice president for market regulation and policy.
The enhanced Nasdaq SMARTS surveillance system is expected to be fully implemented by the summer of 2018. It gathers data from trading venues through direct real-time feeds. The information is distilled into visualizations and alerts that can help identify potential manipulative and deceptive activity across debt and equity markets.
“By supporting IIROC over the past several years in its rigorous efforts in monitoring and protecting Canada’s markets, this has complemented Nasdaq’s relentless commitment to leveraging technology to strengthen the integrity of the global capital markets,” said Lars Ottersgård, executive vice president and head of market technology at Nasdaq.
IIROC currently uses an earlier version of Nasdaq SMARTS to oversee markets and conduct investigations. During the fiscal year 2016-2017, more than 446 million trades on five stock exchanges and eight equity alternative trading systems were monitored. That resulted in 1,470 trading halts, 83 cease-trade orders, and 53 single-stock circuit breakers.
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