• Christian Voigt, Senior Regulatory Adviser at Fidessa


• 27.08.2015 01:00 am
Compliance and risk

Technology is meant to make life easier. Be it a smart phone, TV or fridge, or even a smart water kettle, they all promise a simpler life. Whether they deliver on that is another matter entirely and the idea that more technology always equalsbetter is debatable, particularly considering that my new bathroom scales tweet my weight every time I step on them.

Like the ongoing trend of trading automation, the need for smart solutions also applies to market surveillance, much of which is already automated. While this has clear advantages in detecting some of the potentially abusive strategies defined under MAR, such as wash trades or layering and spoofing, the key is getting the balance right so that you’re actually monitoring for those orders that really need attention.

Consider ESMA’s proposal to mandate surveillance for possible manipulative practices around indications of interest (IOIs). It’s straightforward enough to build an alert that informs you of unusual volumes of IOIs, but considering their non-committal ‘indicative’ nature is that really desirable or will it just clog up your screen? In some scenarios perhaps the best technology is that which integrates with its human users to lighten the load rather than replacing them altogether. A bit like my smart new scales that need to be told when to tweet and when to deduct 5kg before doing so.