The AMF modernises its surveillance tools to ensure safe and transparent markets
Determined to remain at the forefront of detecting market abuse and other misconduct, the Autorité des marchés financiers (AMF) is launching a programme to modernise its surveillance platform to enhance its detection, analysis and investigation capabilities.
In the wake of the 2008 financial crisis, European legislators reformed the framework for financial markets. The revised MiFID 2 directive and the MiFIR regulation, following on from the EMIR regulation on OTC derivatives, will strengthen the ability of national regulators to carry out their duties at the beginning of 2018, thanks to a broader scope of data at their disposal. At the same time, the rise of algorithmic and high-frequency trading in fragmented markets has helped to increase the volume of orders and transactions. It is estimated that the AMF will collect 50 million messages a day in the future.
To ensure that markets operate smoothly, the AMF already has high-performance human and technical resources, which it has invested in over the years. The surveillance platform analyses some 1.6 billion transaction reports and generates an average of 36,000 alerts a year. After cross-checking with the information available on the financial instruments traded, AMF teams analyse more than 500 market events in depth each year, leading to the opening of some thirty investigations.
A platform based on Big Data technologies
ICY (pronounced "I see why..."), the new surveillance tool that the AMF is starting to develop in-house with the support of Cloud Temple, will be based on "Big Data" type technologies, which enable data representing large volumes and of diverse natures to be rapidly exploited. Starting in the second half of 2017, ICY will be gradually rolled out so that it is operational to receive MiFID 2 data from 3 January 2018. Ultimately, the AMF will benefit from increased data storage and cross-analysis capacity and innovative functionalities. The AMF aims to enhance its real-time examination capabilities to improve responsiveness, and also to improve the detection of market abuse using artificial intelligence tools such as machine learning. Certain detection models for price manipulation, for example, could be adjusted automatically using this type of technology.
"In increasingly automated and fragmented financial markets, the detection of insider dealing or market manipulation requires sophisticated and innovative tools capable of deciphering complex and unstructured information.says Alexandra Givry, Director of the Market Surveillance Division. ICY will enable the AMF to make better use of the vast amounts of data available to carry out its market surveillance and investigation activities, and to enhance its ability to analyse market trends and the impact of regulation.
Read more on AMF website