Financial technology provider SunGard has updated its Protegent market surveillance solution to help regulators, trading venues and brokers meet European Securities and Markets Authority (ESMA) guidelines on market abuse.
Protegent is designed to allow users to monitor, detect and resolve market manipulation and insider trading activities. New features include a rules library that supports compliance with ESMA’s ‘Systems and controls in an automated trading environment for trading platforms, investment firms and competent authorities’ guidelines and other regulatory changes.
The ESMA guidelines cover the use of electronic trading systems, including algorithms, by investment firms, the provision of direct and sponsored access. Trading platforms are required to monitor in real time their electronic trading systems.
They should also keep appropriate records and hold regular reviews to ensure problems are dealt with effectively. In addition algorithms must comply with MiFID and must be robust enough to ensure continuity and regularity in the performance of investment services and activities in an automated trading environment.
Protegent provides real-time cross-market surveillance by analysing orders, trades, positions, historical data and market data from multiple trading venues and regions. Users can analyse trading patterns across single or multiple asset classes and trading venues. The product also helps firms detect and act on specific behaviours outlined by ESMA, including suspicious manipulative activities such as quote stuffing, momentum ignition, layering and spoofing.
“The need for improved surveillance is largely being driven by the trend towards automated trading and the migration of more asset classes onto exchanges,” said Rebecca Healey, senior analyst at financial research firm TABB Group. “Technology like SunGard’s Protegent can help firms comply with the latest rules, scale for increased trading volumes and monitor activity across regulatory jurisdictions, regions and asset classes.”