Sunday, June 24

HKEX first in Asia for Nasdaq’s ML surveillance tech

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Hong Kong Exchanges and Clearing (HKEX) has become the first exchange customer in Asia to deploy Nasdaq’s latest machine learning and participant relationship discovery technology across its equity market.

Nasdaq’s market surveillance tech, called SMARTS,  will boost HKEX in safeguarding market integrity, and better protect investors, according to a company statement.

Nasdaq worked with HKEX’s market surveillance team in implementing machine learning to analyze unusual trading activities and their subsequent categorization by surveillance analysts.The aim of these algorithms is to predict which actions analysts are likely to take based upon their handling of historical activity as well as discovering new relationships within the data.

The ML capabilities will initially be used by HKEX to prioritize the surveillance workflow. The technology predicts the likelihood that the event will lead to an action by an analyst.

This will particularly help in high workload situations, such as during the opening and closing of the markets.

The new prioritization ranking is then used to complement traditional quality controls in relation to alert handling, which then enables surveillance officers to identify outliers where the actual handling of alerts has differed from the prediction of the algorithm.

SMARTS has also supplied trade relationship visualization to complement a suite of market abuse alerts targeting group activity.

The new visualizations improve HKEX’s efficiency to immediately review how participants coordinate trades through multiple accounts for all historical market activity.

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