ASIC will have tools similar to those used by high frequency traders built into its new market surveillance system.

ASIC has chosen First Derivatives Pty Ltd to design, build and host ASIC’s new market surveillance system. First Derivatives Delta Stream+ Market Surveillance solution is based on technology already used extensively for market data capture, alerts and analytics and high frequency and algorithmic trading.

The new surveillance system builds on a strong existing surveillance framework, and will allow ASIC to plan for a future that will include greatly increased message traffic, new technologies, increased competition between trading venues and the increased globalisation of capital markets.

The surveillance system will promote the integrity of our financial markets through the prevention, detection and deterrence of market misconduct, and provide a greater capability to monitor all types of trading across markets as well as across different products.

The new system enables ASIC to interrogate very large data sets and monitor market activity, consistent with the increased use of technology in day-to-day trading. The system will have strong layers of security built into it, ensuring that ASIC maintains control over data at all times, and will allow for a robust framework that will deliver significant benefits to ASIC’s work, including:

• functionality that is appropriate for the Australian market, and flexible for a changing trading environment; and
• advanced analytics that will allow for the analysis of complex data sets and the ability to connect patterns and relationships.

Selection of First Derivatives followed a competitive tender process. A thorough evaluation process has also ensured that the new system will represent value for money for ASIC and the market participants and operators that fund ASIC’s market supervision through cost recovery.

ASIC thanks all parties for participating in a competitive tender process. ASIC looks forward to continuing its surveillance relationship with SMARTS, a relationship that assisted ASIC to successfully assume market supervision responsibilities from ASX in 2010.