Nice Systems’ fraud system detects abuse in Russian market

“We are determined to ensure fair trading practices and prevent market abuse," says head of Russia's Fed. Financial Market Service.

December 2, 2010 23:10
2 minute read.
A man stands in front of a display board at the Australia Stock Exchange in Sydney Monday, Aug. 23,

Australian mining stocks 311 AP. (photo credit: Associated Press)

Israel-based Nice Systems’s market-surveillance unit Nice Actimize has helped Russian financial regulators detect suspected market abuse.

“We are determined to ensure fair trading practices and prevent market abuse,” Vladimir Milovidov, head of Russia’s Federal Financial Market Service (FFMS), said Thursday in a statement. “Sophisticated abuse patterns require sophisticated compliance measures.”

“We conducted a rigorous search with stringent criteria before choosing Nice Actimize for the automation of our regulatory compliance initiatives,” he said. “In the two weeks since going live with the solution, we have already identified three potential wash-trade cases that we are currently investigating.”

Actimize’s market-surveillance solution includes compliance monitoring for equity, fixed income, futures and other securities and trading products.

It was implemented in July to help combat market manipulation and insider trading.

The FFMS monitors tens of millions of orders daily from the two primary Russian exchanges, the Moscow Interbank Currency Exchange (MICEX) and the Russian Trading System (RTS).

The FFMS sought the Actimize market-surveillance solution in its efforts to enforce a new Russian Federal Law that is expected to go into effect in January. The new law enables the FFMS to enact new regulations and is aimed at counteracting the abuse of inside information and market manipulation. It is intended to reinforce market integrity and transparency in Russian financial markets.

Nice Actimize’s market-surveillance solutions are used by the largest European and American financial institutions and regulators to increase their insight into suspicious behavior and improve risk and compliance management.

While some regulators, securities firms and investment banks still rely on manual or semi-automated processes to monitor compliance with market- abuse regulations, automation such as that provided by Nice Actimize has improved the identification and reporting of suspicious transactions.

Nice Actimize said its system leverages proven detection models with sophisticated analytics to assign priority scores to alerts, and it improves efficiency for regulators, trading managers and compliance staff.

“We are pleased that the FFMS has joined our growing list of regulators across the globe that are leveraging our technology in their efforts to detect non-compliant activities,” Nice Actimize president and CEO Amir Orad said Thursday in a statement. “By automating the detection and prevention of market abuse, the FFMS and the Russian Federation have established themselves as industry leaders.

“Russian regulations and penalties are expected to continue to proliferate, and proven, powerful and flexible tools must be in place to ensure a meaningful impact for the myriad of traders who are committed to fair trading practices.”

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