Surveilling the market with cognitive computing and behavioural analytics, and leveraging the power of machine learning, Nasdaq’s Buy-side Compliance, formerly Sybenetix, helps hedge funds and asset managers monitor their portfolios’ compliance in a constantly shifting regulatory environment. A pioneer in its field, Sybenetix was acquired last year for an undisclosed sum by Nasdaq as part of its sustained push to remain at the leading edge of the fintech revolution.
Earlier, Nasdaq also entered into a strategic alliance with Digital Reasoning which uses natural language processing to analyse the context and content of human communication and thus provide early warning to surveillance analysts. Both companies fit seamlessly in Nasdaq’s broader strategy to buy into specialised expertise in order to stay in sync with regulatory and technological evolutions, while still continuing to enhance its SMARTS surveillance technology -- which is sold into the bank, exchange and regulator sectors -- with these types of capabilities.
The Nasdaq Buy-side Compliance software uses algorithms to learn the behaviour of people within an organisation. Applied to trading floors, for example, the software can sniff out rogue traders well before irreparable damage is inflicted. As increasingly complex and comprehensive regulations come into force - such as the second iteration of the Markets in Financial Instruments Directive (MiFID II) in Europe - financial services providers are scrambling to adjust to the more dynamic and transparent reality about to take shape.
In the process, a $2bn market for new MiFID II-ready systems and platforms was created. Nasdaq is riding that wave with a product suite of unequalled power. Its software fully complies with the more than 7,000-page-long MiFID II - a volume of instructions equal to about five times the length of Tolstoy’s War and Peace, a classic literary doorstopper.
The CFI.co judging panel recognises the immensity of Nasdaq’s achievement; not only does the company’s software contain in-depth knowledge of every imaginable financial regulation framework, it is also able to spot any deviation from the rules, or other operational anomaly, in real-time. The judges agree to name Nasdaq winner of the 2018 Most Innovative Compliance Management System Global Award.