France's AMF taps big data technology to improve market surveillance
The Autorité des Marchés Financiers, France's market regulator, announced in January that it is launching an effort to modernize its system for monitoring market activity and enhance its ability to detect, analyze and investigate suspicious activity.
The new monitoring system, called ICY, will be based on "big data" technologies that will allow the AMF to quickly screen large amounts of data, the regulator said. This type of technology is needed due to the rise of algorithmic trading, which has contributed to higher message traffic and trading volume for exchange-traded products. The new system also will position AMF to receive and process new streams of data that will become available from January 2018 onwards, when the MiFID reporting requirements take effect.
The new system, which is being developed by Neurones, a consulting and IT services company based in Paris, will be gradually rolled out during the second half of 2017. Once the process is completed, the AMF said it will have significantly greater capacity to archive data and perform multi-variate analysis. The regulator explained this will reinforce its ability to examine transactions in real time and improve the detection of market abuses through the use of artificial intelligence tools such as machine learning.
"Financial markets are increasingly automated and fragmented. In this environment, detecting insider trading and market manipulation requires sophisticated, innovative tools able to decrypt complex, unstructured data," noted Alexandra Givry, head of the regulator's market surveillance department. “ICY will enable the AMF to exploit the large amounts of available data and thus better execute its market surveillance and investigation activities. It will also strengthen its capacity to analyze market trends and the impact of regulation.”
