About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Technology Catches Up To Regulators’ Monitoring Demands

Subscribe to our newsletter

Conducting a simple real-time statistical analysis of financial market activity does not necessarily require “sophisticated AI or machine learning,” says Guy Warren, CEO of ITRS, an application performance management and big data analytics provider.

The purpose of conducting such an analysis is to determine when a circuit breaker kicks in to catch and stop algorithmic trading activity that has exceeded volatility limits, whether that halt of trading was warranted, or what caused it. ITRS real-time monitoring and analytics tools let it act directly on a client’s behalf, triggering a “kill switch” or “pause,” so people can manually investigate relevant trading and market data, Warren explains.

Regulators are trying to get greater control and specificity around the use of such sudden stops of market activity, adds Warren.

“Regulators are right to push for firms to have the ability to catch fluctuations and pause activity,” he says. “They increased the number of liquidity venues subject to a requirement to catch fluctuations — in response to a very large OTC presence which they thought might be manipulated.”

The regulatory push is driving more interest in implementing circuit breakers, but regulators’ wishes appear to now be better timed. Technological capabilities now make it possible to monitor ticks for 1 million instruments coming from different asset classes and regions, in a manner that was impossible four years ago. As a result, the position of some regulators that firms ought to be able to monitor all the instruments they are dealing with is now feasible when it wasn’t before, Warren explains.

Better technology makes it possible for computers to check market news that is triggering extreme price changes and evaluation if those fluctuations are genuine, he observes. “Telling if what’s happening is right can be done cost-effectively,” says Warren. “That’s not only on liquidity venues, because they have a matching engine or it’s not too hard to build one in, but on trading venues, it is possible. Most regulation will come in on trading venues, because that’s the safest place to try to catch [an unjust fluctuation]. The trading venues are trying to stop participants from putting bad trades or rogue data into the marketplace.”

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Unlocking value: Harnessing modern data platforms for data integration, advanced investment analytics, visualisation and reporting

Modern data platforms are bringing efficiencies, scalability and powerful new capabilities to institutions and their data pipelines. They are enabling the use of new automation and analytical technologies that are also helping firms to derive more value from their data and reduce costs. Use cases of specific importance to the finance sector, such as data...

BLOG

Bloomberg BQuant Wins A-Team AICM Best AI Solution for Historical Data Analysis Award

When global markets were roiled by the announcement of massive US trade tariffs, Bloomberg saw the amount of financial and other data that runs through its systems surge to 600 billion data points, almost double the 400 billion it manages on an average day. “These were just mind-blowingly large volumes of data,” says James Jarvis,...

EVENT

RegTech Summit London

Now in its 9th year, the RegTech Summit in London will bring together the RegTech ecosystem to explore how the European capital markets financial industry can leverage technology to drive innovation, cut costs and support regulatory change.

GUIDE

The DORA Implementation Playbook: A Practitioner’s Guide to Demonstrating Resilience Beyond the Deadline

The Digital Operational Resilience Act (DORA) has fundamentally reshaped the European Union’s financial regulatory landscape, with its full application beginning on January 17, 2025. This regulation goes beyond traditional risk management, explicitly acknowledging that digital incidents can threaten the stability of the entire financial system. As the deadline has passed, the focus is now shifting...