Software AG recently unveiled the latest addition to its Apama market surveillance solution with alerts to identify FX (Foreign Exchange) market manipulation and benchmark fixing. Developed in partnership with tier one banks, these new alerts provide compliance and market monitoring personnel with in-depth monitoring of FX trading to identify benchmark fixing, cross liquidity-venue manipulation, and other suspicious behavior. Furthermore, it enables trading institutions to customize real-time detection scenarios to meet business specific needs and to evolve surveillance in response to the latest regulatory demands.
“Detecting rogue behavior or market manipulation is not a trivial task,” said Dr. John Bates, CTO Intelligent Business Operations & Big Data, Software AG. “You need a robust surveillance monitoring capability that can be calibrated to the specific trading profile of each bank. FX benchmark alerts are not generic, which means ‘off-the-shelf’ packages are rendered useless before they even begin.”
Software AG’s rapid response to regulatory concerns about FX markets has been driven, in part, by its deep industry and technical heritage in front office FX eCommerce trading solutions, in which Apama is an industry leader. This unique combination of front and middle office FX trading experience ensures clients rely on Software AG to deliver Apama solutions and advise on best practices in this new frontier of regulatory scrutiny. Software AG’s Apama Market Surveillance and Monitoring solution is in use at tier one banks to monitor FX spot and FX NDF (non-deliverable forward) markets globally.
“It is critical that you have the ability to configure your system for institutional or retail venues, electronic or voice trading, exchange or OTC (over the counter), as well as several other trading considerations,” said Dr. Bates. “Equally, percentages and periods of trading execution can vary greatly across asset classes and accepted trading practices within firms up to, and during, the fixing/settlement point. Our approach is simple. We work closely with our clients to create the surveillance alerts that make sense for them. We are the only Market Surveillance and Monitoring solution provider that takes this approach.”
Compliance personnel can dig deep into trading anomalies and determine the root cause quickly. Alerts can also trigger processes that kick-off an investigation by automatically creating a case and launching a workflow.
“Responding quickly to regulatory changes or split-second market anomalies can make the difference between being perceived as trustworthy, or as the next bank that’s in the headlines due to a trading crisis,” continued Dr. Bates. “The rise of electronic trading renders many current approaches to market surveillance and monitoring akin to chasing Ferraris on a bicycle; with the Apama solution, compliance personnel can take control, build surveillance detection scenarios and define workflows on their own terms.”
Software AG has multiple technologies converging to deliver a next generation market surveillance capability more powerful than anything else available today in the market including in-memory data management, analytics and decision tools.
In-memory data management comprises high performance messaging and in-memory data grids that enable fast-moving data to be collected and made memory resident. This allows the data to be highly available and analyzed in milliseconds.
At the core of the solution is a complex event processing (CEP) engine that enables the data to be analyzed as it is collected with patterns designating relationships between data items (or trading events). An analytics dashboard presents all FX benchmark alerts visually as heat maps, graphs and other intuitive representations.