«Prometheus» - The new application for trade surveillance and its opportunities
With the development of «Prometheus», SER took the next level – embedding latest technology e.g. Artificial Intelligence into their Surveillance Framework. Christian Müller, Head Surveillance & Enforcement, answers questions about the new application.
Hello Christian! As Head Surveillance & Enforcement, you are responsible for the development of the new trade surveillance application «Prometheus». The application is in the final phase of development. The development of such an application is a big project. Can you provide insights that led to this new initiative?
Most trade surveillance teams use run-of-the-mill market surveillance products whose main focus is primarily on quantitative alert generation. Those alerts require extensive attention from our surveillance analysts. As a result, legacy systems do not only impose high cost related to manual alert handling and maintenance, but do also open windows for possible market abuse practices remaining undetected.
Furthermore the current systems is not able to combine personal data with trade data. Since the entry into force of the Financial Market Infrastructure Act (FinfraG) reporting regime, the trading surveillance unit now has at its disposal more information regarding the beneficial owner of a transaction. Thus, the trade data can be linked to the transaction data.
The use of the latest technologies should allow a clear, systemic focus on higher-quality alerts. This will allow trade surveillance specialists to focus even more on the accurate investigations in order to generate real added value.
What are the advantages of this application compared to the software solution used so far?
Legacy trade surveillance systems frequently suffer from a high number of generated alerts, which are often resulting in a high number of false positive warnings. «Prometheus» uses Data Analytics, that is significantly improving the parametrization of surveillance models, thereby reducing false positives and increasing chances of more effectively detecting cases of potential market abuse and insider cases. As a result our analysts can focus their attention to the most suspicious cases supported by «Prometheus» with more detailed information and advanced Key Risk Indicators.
Gaining in efficiency and effectiveness while boosting quality are the most important driving factors in this. «Prometheus» sees us make the move towards becoming a leading global trading surveillance unit: using the latest technological approaches, it ensures that we don’t react to change, but rather that we trigger change ourselves.
What areas of application could you imagine for «Prometheus» outside the topic of trade surveillance?
As a logical first step SIX is currently elaborating how «Prometheus» can be expanded across the group e.g Market operations or BME. On a mid-term basis regulators and other stock exchanges could be target groups for our new Surveillance solution. Even in a modified way «Prometheus» could be used by financial institutions for their Trade Surveillance activities.
In general and as part of the vision, «Prometheus» could be easily adapted to any kind of exchanges e.g. energy, CO2 Certificate market etc.
When do you expect the final introduction of «Prometheus» at SIX Exchange Regulation AG?
The full implementation of «Prometheus» is scheduled to go live in Q4 2021. Insider detection, which was the first phase of «Prometheus», was successfully launched in Q4 2020.