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Nasdaq Inc. has recently reported the first Asian exchange to deploy the latest machine learning and participant relationship discovery technology of the Nasdaq SMARTS Market Surveillance. The Hong Kong Exchanges and Clearing Limited (HKEX) will be using the said technology across its equity market to further improve its capabilities in protecting the market integrity of the exchange, and to safeguard the investors better.

Both HKEX and Nasdaq have worked for the full implementation of the Market Surveillance technology. This is to detect analyze unusual trading activities and their succeeding categorization and this will be observed by surveillance analysts.

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On July 27, 2010, NASDAQ OMX Group, Inc. acquired SMARTS Group, the world-leading technology provider of market surveillance solutions to exchanges, regulators and brokers.

Also, the system is used to estimate specific actions that analysts could take based from their historical activities. The data could also help the exchange to further discover new relationships within a certain period. With this, HKEX’s surveillance team will have better focus on ably monitoring unusual trading activity.

 “As a market operator, we have always strived to be at the forefront of embracing and applying emerging technologies that will strengthen the integrity of our markets,” Managing Director and Head of Market Surveillance and Monitoring of HKEX Garbo Cheung, told reports. “We look forward to continuing our collaboration with the SMARTS team in further building our machine learning capabilities in our market surveillance endeavors.”

“HKEX has been instrumental in contributing to this collaboration and embracing emerging technology to protect market participants,” Senior Vice President and Head of Risk & Surveillance Solution of Nasdaq Valerie Bannert-Thurner, said in a statement. “The evolution of SMARTS is heavily driven through client collaboration and our mutual interest in improving and maintaining market integrity, and we look forward to supporting their continual innovative approach to market surveillance.”

The implemented system will prioritize the surveillance workflow of the exchange. As mentioned, the adapted technology estimates a certain action that could be done by analysts. This will be helpful in monitoring operations especially during times where work load is high.

Moreover, SMARTS has provided a better trade relationship visualization to match a collection of market misuse signals which targets a certain group activity. The new visualizations boost the effectiveness of HKEX to instantly observe how contributors harmonize trades through numerous accounts for the entire chronological market movement.

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