Smarts, the global leader in market surveillance systems and services has extended its leading Smarts.broker product with coverage for Futures Commission Merchants (FMCs), Introducing Brokers (IBs) and other market participants who trade in the CME Group markets.
The new product, unveiled today in Chicago, provides in-depth surveillance services across all futures and options instruments.
Developed and supported by SMARTS, the world's most respected name in market surveillance, the SMARTS.broker service automates the identification, and enhances the investigation of prohibited trading activities on futures markets. Delivered via a managed service, SMARTS.broker streamlines traditionally time-intensive tasks such as monitoring for wash trades and crossings that violate individual CME, CBOT, NYMEX and COMEX market rules. The platform also identifies more complex scenarios such as front running and market manipulation in the form of market dominance, churning, entry and deletion of large orders with the intention of misleading the market, and the manipulation of settlement prices.
Speaking at the launch, SMARTS Group CEO, Dr Andreas Furche outlined the challenges of monitoring a marketplace as complex as the CME Group markets. "As one of the most diverse derivatives marketplaces, the CME Group markets are extremely complex and data intensive. This presented a large development challenge with SMARTS monitoring more than three million trades a day across 300,000 instruments. SMARTS has tailored the alerts for this unique market ensuring that the system is able to detect even the most subtle of prohibited trading behavior. We believe that SMARTS.broker is the most comprehensive futures and derivatives surveillance solution available," said Dr Furche.
"With increased regulatory pressure on futures and derivatives markets in general, the SMARTS offering provides Futures Commission Merchants (FCMs), Introducing Brokers (IBs) and other market participants with an extremely cost effective and valuable tool to monitor trading activity and comply with exchange rules and market regulations," said Dr Furche. All current and future alerts are kept up to date with changes in the regulatory framework and market rules at no additional cost.
The system requires little to no internal IT set-up or integration work for the broker, thanks to SMARTS investment in infrastructure with connectivity to the CME Group Market Data Platform and Drop Copy Service, directly delivering order and execution data to the SMARTS.broker managed service.
"Understandably, most compliance functions within broking firms do not have the budget allocation or expertise required to build the necessary infrastructure to deal with this level of complexity. SMARTS has made significant investment in the infrastructure and development of the solution enabling us to share the cost among multiple brokers, therefore pricing the service at a level which provides real value," said Dr Furche.
SMARTS has over 15 years experience in the monitoring of securities markets. As the global leader SMARTS is ahead of the changing dynamics of the securities markets worldwide. The complex nature of trade surveillance in the futures markets is well suited to the SMARTS.broker platform, having launched the world's first platform for cross-market monitoring of derivatives last year. "SMARTS.broker monitors most of the world's major derivatives markets which has provided us a deep understanding and expertise in the complexities of detecting prohibited trading behaviors on derivatives markets worldwide," said Dr Furche.
SMARTS.broker for the CME Group markets incorporates the latest regulatory changes, has trade-by-trade and quote-by-quote market visualizations, with filtering at house, account and trader level to highlight unusual patterns of trading. It has the ability to link instruments in multiple markets, including options and spread strategy instruments against underlying contracts and provides comprehensive coverage of all futures markets.