Traders are getting a better look into the energy trading markets thanks to Nasdaq OMX via its newest iteration of SMARTS, its stock surveillance system.
The system enables energy trading desks at producers, marketers and financial services firms of companies to proactively monitor trading – detect and document market abuse and protect against market manipulation.
SMARTS Surveillance watches trading across both physical and financial energy markets through its ability to detect suspicious trading behaviors, document all potential instances of abuse, and protect against market manipulation. These alerting capabilities include: price manipulation scenarios, banging the close/open, physical versus financial-related index manipulation, uneconomic trading, use of market power at discrete time intervals or contract markets, order book abuse (e.g. spoofing, layering, excessive corrections), quote stuffing, insider trading, front-running, collusion and parking trades.
“As regulators such as FERC, CFTC, ACER increase their focus on improving the integrity and transparency in the energy markets through global regulatory initiatives including REMIT, Dodd Frank and Order 670, market participants are monitoring proactively their energy trading activity,” said Rob Lang, Vice President and Head of SMARTS. “In developing this module, we are proud to collaborate with both our customers and expanding beyond the community to include those producing energy or that trade energy assets for hedging purposes and are focusing much more attention on their surveillance practices both domestically and internationally.”
To ensure compliance with global regulations and reduce a firm’s exposure to risk, SMARTS Surveillance for Energy offering is designed to analyze every bid, offer, trade, amendment and cancellation in the context of a firm’s own patterns as well as the patterns of all other market participants. Additionally, the new module benefits from the proven business technical and surveillance expertise of the SMARTS ecosystem, including a library of best practice alerts developed across the SMARTS user base.
