TheFinancial Services
Authority(FSA) is updating its
fraud-detection system with complex event processing (CEP) software
to monitor transactions and detect insider trading and other market
abuses as they occur.
The Surveillance and Automated Business Reporting Engine (Sabre)
II is being designed, built and managed by IT-services firm
Detica under
a contract worth £17m over seven years.
The FSA will use the system to monitor trading on UK markets and
check transactions reported under the
Markets in Financial Instruments Directive (Mifid).
Sabre II will use Progress Software’s Apama event-processing
platform, which will give the FSA real-time graphical dashboard
tools that will alert staff to potential financial abuses.
A graphical CEP development tool, Apama Event Modeller, will
allow the FSA to rapidly develop abuse-detection rules, and respond
quickly to the changing demands of Mifid.
The regulator has said that it is keen to improve its record on
cleaning up financial markets. An FSA report from March 2006 found
that “some informed trading may have taken place” before 29% of
takeover announcements.
At the time, FSA managing director Hector Sants said, “The
analysis shows that there was no improvement in market cleanliness
in the period after the introduction of the FSA’s new powers. This
suggests that visible enforcement action may be the key tool in our
work to reduce market abuse.”
Simon Asplen-Taylor, head of market and regulatory services at
Detica, said, “The big difference between the old and new platforms
(apart from the data) is that the system will be real-time.
Progress Apama gives the ability to develop new rules quickly and
modify them for new types of abuse. Using the same trading
technology as the clients means there is a greater chance of
catching criminals.”
The Sabre II system consists of Sun Ultrasparc 4+ servers
running SAS Enterprise Intelligence Platform, AMD Opteron servers
running Progress Software’s Apama for Alerting, and Oracle and KX
Systems’ KDB+ relational databases.
Thinktank highlights five ways to MiFID compliance >>
Don’t let Mifid
catch you unprepared >>
LSE outlines MiFID support >>
Comment on this article:
computer.weekly@rbi.co.uk