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Developing and implementing an appropriate surveillance system and organisation
Journal of Securities Operations & Custody,
6
(3),
270-281
(2014)
Abstract
The securities trading industry has evolved rapidly since the implementation of MiFID in 2007. With a growing regulatory framework and increased surveillance obligations for firms and venues, it is not an easy thing to come out on top. Implementing an appropriate, well-functioning surveillance system requires a firm to adapt the setup to specific conditions, and to find the right answer to all the questions related to the task. The objective of this article is to present to the reader a number of relevant principles and key areas that need to be taken into consideration when implementing and developing a system with sufficient technical capacity and well-trained, experienced staff able to protect your own organisation — as well as the rest of the market — from different types of market abuse and other trading malpractices. The article also traces the changes in the trading landscape since MiFID was implemented, with emphasis on automation, fragmentation and high frequency trading.
Keywords: market abuse; insider trading; market manipulation; market abuse regulation (mar); market surveillance; trade surveillance; surveillance system; surveillance organisation
The full article is available to subscribers to the journal.
Author's Biography
Peter Nylén has been working in the field of market surveillance since 2000, when he joined the Stockholm Stock Exchange’s (NASDAQ Stockholm) surveillance team. Subsequently, he spent five years at Finansinspektionen (the Swedish Financial Supervisory Authority) as a senior market abuse investigator before moving on to the Scandinavian multilateral trading facility (MTF) Burgundy as Head of trading surveillance until that organisation was acquired by Oslo Börs in 2013. Peter is currently Head of Outsourced Trading Surveillance (OTS) at the Swedish RegTech company Trapets AB. The OTS team is an independent department within Trapets that delivers real-time trading surveillance as an outsourced service to a growing number of European investment firms covering investigation and reporting cases of market abuse. Along with heading the OTS team, Peter is also the Product Manager for the trade surveillance system InstantWatch Market and is deeply involved in implementing this system with clients around the globe. This gives him a unique insight into the current market abuse-monitoring challenges for regulators, venues and firms combined with a solid experience of operational monitoring.
