The Commodity Futures Trading Commission (CFTC) is enhancing its market surveillance and fraud detection capabilities by deploying Nasdaq’s surveillance technology. As the CFTC embraces an expanding regulatory remit, it will look to Nasdaq’s Market Surveillance platform to support its mission to promote market integrity. The upgraded technological capabilities follow CFTC Acting Chairman Caroline D. Pham’s pledge in March to secure an enhanced market surveillance system as part of a broader effort to modernize the agency and replaces the CFTC’s ‘90s-era legacy system.
“As our markets continue to evolve and integrate new technology, it’s critical that the CFTC stays ahead of the curve,” Pham said. “Nasdaq Market Surveillance will, for the first time, provide the CFTC with automated alerts and cross-market analytics that will benefit each of the CFTC’s operating divisions and better protect our markets from fraud, manipulation and abuse. This new suite of solutions will also improve efficiency in analyzing market trends and identifying unusual or disruptive trading activity so that our lean and talented staff can take appropriate action more quickly. It’s the latest example of our work in recent months to bring about the transformation and optimization necessary to make the CFTC a 21st century regulator.”
“The CFTC is a leader in derivatives regulation, and Nasdaq’s Market Surveillance platform will be a key component to our success.”
“Today’s financial markets demand advanced surveillance technology that can adapt to rapid regulatory evolution and emerging asset classes,” said Tal Cohen, president at Nasdaq. “As both an owner and operator of heavily regulated markets, as well as a technology provider to financial services companies worldwide, Nasdaq occupies a unique position at the intersection of innovation and regulation. We’re proud to partner with the CFTC and support their mission to promote the integrity, resilience, and vibrancy of U.S. derivatives markets.”
Nasdaq Market Surveillance serves more than 50 exchanges and 20 international regulators.
The CFTC is responsible for overseeing a wide array of derivatives markets ranging from fixed income, commodities and currencies, crypto assets, and event-based markets. The agency is also poised for growth in digital asset markets, launching a crypto sprint to implement recommendations from a recent White House report.
The growth in both traditional and new markets and products, combined with innovations in market structure, such as the launch of continuous trading hours, require increasingly sophisticated tools to prevent and detect potential market abuse. Nasdaq’s platform enables integrated monitoring across CFTC markets and provides resilient and scalable surveillance capabilities to maintain the integrity of derivative markets.
The Nasdaq platform enables regulators globally to identify potential manipulation patterns spanning multiple asset classes, conduct detailed transaction-level analysis, and generate automated alerts across products and trading venues. The platform’s flexible architecture delivers a unified view of market activity with granular data insights and the ability to scale rapidly through periods of heightened volume and volatility. This includes access to comprehensive order book data to support real-time analysis and decision-making, which is a critical frontier to prevent and detect market abuse across both traditional and crypto asset markets.
