As trading gets ever faster, compliance with new regulations can get tougher for prime brokerage and clearing firms. But application service provider and technology firm FTEN designed a new compliance surveillance system, named TradeXaminer, to help.
TradeXaminer enables prime brokers and clearing firms to monitor trading activity for suspicious behavior to ensure that it meets securities industry regulators’ existing and future compliance mandates. In doing so, TradeXaminer allows FTEN’s customers-large and medium-tier clearing and prime brokerage firms-to expand trading volume while they simultaneously observe trading activity either at the end of the trading day or in real time. The system watches for trades that fall under prohibited trading patterns, such as fictitious trading, wash orders or large groups of trades at the open or close of the markets, says Ted Myerson, president of the New York-based FTEN.
“TradeXaminer handles a criteria of reporting tools that the clearing firms use to be in compliance with FINRA,” Myerson says, “but also has a set of reporting tools to give them a finer level of data that’s same-day, rather than at some later time, and all in one place.”
Last month Penson Financial Services, the broker-dealer and clearing services subsidiary of Dallas-based Penson Worldwide, implemented TradeXaminer for its more than 250 broker-dealer customers.
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