Sell-Side Technology Awards 2023: Best sell-side market surveillance product—Nasdaq

Overview

Nasdaq’s Surveillance Solutions is a global provider of cross-market, multi-asset, multi-venue trade surveillance and market risk solutions. Firms today must monitor trading across an ever-expanding number of markets and develop visibility across multiple venues and asset classes. Nasdaq Surveillance provides a solution to harness the value of that fast-growing pool of data with real-time analytics and reporting. The firm’s technology supports its customers to maintain fair markets through preventing market abuse.

The solution

• Technical challenges: Nasdaq sources, captures and maintains all trading and market data for clients
• Interpretative challenges: Nasdaq translates regulatory guidelines into pre-configured alerts that detect different patterns of market abuse
• Management challenges: Nasdaq makes analyzing and managing alert and data output easier, allowing clients to demonstrate that alerts are being properly managed for case-building
• Innovation challenges: New approaches and technologies are applied to surveillance scenarios to drive efficiency in how alerts are escalated

Secret sauce

• Market data: Direct connectivity to over 200 markets for sourcing of customer and market data. Coverage across all asset classes, including OTC and crypto. Full order book visualization and market replay capabilities
• More than 300 preconfigured alerts: Nasdaq Surveillance covers market abuse scenarios including spoofing, marking the close/fix, front-running and insider trading
• Visualization tools: “Spread” provides a whole-of-market view of customers trading against the context of the market, while “depth” visualizes order book depth

Recent enhancements

• Pinging alert: Monitors where the entity has traded a small volume in a dark pool then traded a much larger volume shortly thereafter
• Workbench: Improves efficiency and management of alerts via modular interface and configurable analytics
• Market data quality: Several new market data feeds, including ICE US, increasing the market depth capabilities to 20 levels on both sides of the book
• Evidence cards: Provides quick visualization of relevant information related to a suspected incident

Future objectives

• Reduce false positives: Building out of new tools and APIs to support customers in optimizing their alert parameters
• Nasdaq Surveillance for Crypto: Working with global authorities to enhance Nasdaq’s product to meet new legislations covering digital assets
• New AI capabilities: Incorporating machine learning capabilities into the system, with a focus on anomaly detection and expanding the data infrastructure to allow easier integration of machine learning

Why they won

These and other WatersTechnology awards have been a happy hunting ground for Nasdaq over the years, thanks largely to its all-conquering Smarts platform. This year’s win comes courtesy of the firm’s Nasdaq Surveillance Solutions offering, which on closer inspection features much of the DNA that made Smarts so successful. The platform features connectivity to over 200 markets on the data front, while its asset class coverage is truly universal and even includes support for OTC instruments and crypto. Its more than 300 preconfigured alerts cover every conceivable market abuse scenario users could want, making it the most comprehensive market surveillance platform on the market today.