SMARTS.broker
SMARTS.broker for Derivatives
The SMARTS.broker for Derivatives module is the world’s first cross-market derivatives compliance product. It is available through the core SMARTS.broker service as an additional module.
SMARTS.broker for Derivatives provides complete trade surveillance coverage of all listed instruments across all major derivatives markets.
- All order and trade messages,
- Details of best bid/ask at any point in time during trading day,
- Market depth view via display of multiple quote levels
SMARTS.broker for Derivatives provides a comprehensive set of alert scenarios, including:
| Regulatory Protocol | Activity | Alert Types |
|---|---|---|
| Market Trading/ Business Rules | Trading actions in breach of specific market rules | Includes Order Splitting, Deconstructing of Strategy Trade, Failure to Issue RFQ and Block Trade Allocation. Plus new alerts can be developed in accordance with the applicable market rules. |
| Securities Legislation, Market Abuse, and Suspicious Transaction Reporting | Market Manipulation and Wash Trades | Includes Marking the Close and other alerts focussed on unusual activity at close, Ramping, Pre-arranged Trading, Churning and Wash Trades. |
| Securities Legislation, Market Abuse, and Suspicious Transaction Reporting | Cross Market Surveillance | Provides aggregated view of trading in all series of a stock option/future against the underlying equity security (or asset), and from that data generates alerts such as Mini Manipulation, Cross Market Insider Trading and Cross Market Frontrunning. |
SMARTS.broker for Derivatives provides various visualisation tools to assist in analysing alerts and trading data.
The new visualisation offers users an enhanced way of consolidating all derivatives attached to an underlying asset into a single view accessed via a user-friendly intuitive interface.
User Interface
SMARTS recognizes that a key component to effective surveillance and compliance is having order and trade information presented in a user-friendly and easy to understand way. SMARTS has developed interfaces which present complex market information in an easy to interpret and meaningful interface.
Alert Scenarios
The following alert scenarios are available through SMARTS.broker:
| Trading Protocol | Alert Types | Potential Breaches |
|---|---|---|
| Securities Legislation, Market Abuse & Suspicious Transaction Reporting | Market Manipulation, Insider Trading | Alerts include Marking the Close and other alerts focussed on unusual activity at the close, Ramping, Wash Trade, Double Printing, Churning, Layering of Orders, Spoofing, and Insider Trading. |
| Broker/Client Conflict |
Front-running, Client precedence | Identifies where a house/proprietary account or employee account trades shortly prior to a significant on-market client order. Also alerts where the house/proprietary account deals in a related derivative instrument. |
| Market/Exchange Trading Rules | Trading activities bound by market specific rules | Customised alerts based on requirements re Substantial Shareholdings, Jitney trades, Cancelled Trades, Short Sell trades. |
| Internal Reporting Requirements | Information Alerts | Facilitates the generation of end of day reports which display trade data according to broker’s specifications. |
|
Derivative Alerts
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Alerts specific to Derivative Markets | Alerts include Order Splitting, Failure to Issue Request for Quote, Crossing Breach, Wash Trade, Strategy Breach, Mini Manipulation and Cross Market Insider Trading (trading in related derivative prior to price sensitive announcement in underlying equity) |
A single subscription to the service entitles the broker to all alerts available. Delivery of some alerts may be dependent upon availability of client level data.
SMARTS.broker
SMARTS.broker is a browser based application which is fast to implement, requires no upgrade or on-site maintenance, and comes with little or no hardware costs.
Through SMARTS.broker we are able to cost effectively increase the quality and efficiency of broker's monitoring and compliance functions. Beyond providing internal compliance with access to a surveillance tool and trading analysis functionality that is the equal to that available to the exchanges themselves, the deployment of the service results in the ability for compliance staff to focus on dealing with incidents and setting policies and procedures to avoid them in future – it thereby forms the backbone of an effective risk management strategy.
Benefits of SMARTS.broker include:
- Comprehensive coverage of all listed instruments on equity and derivative markets
- Access to all market abuse alert scenarios
- In-depth market data analysis tools
- Incorporates the latest regulatory changes
- Functionality that links options, futures and equities
- Hosting and maintenance of all data, software and hardware
- Can be configured to service OTC markets
SMARTS.broker empowers brokers to:
- Easily comply with market regulations and internal risk policies.
- Conduct their own internal surveillance, separately to any external monitoring by the exchange or regulator.
- Rapidly detect infringements well before regulators
- Access full historical trading data (including full order book or market depth quotes) for all listed instruments