Singapore Exchange Regulation (SGX RegCo) is making its monitoring and regulating system more effective with the use of artificial intelligence (AI) improvements.
Introducing AI in regulation can help single out unusual trading activities through analysis of historical data and avoiding noise from developments between the financial markets. Thus, the regulatory agency can focus on smaller sets of suspicious trading actions, identified by the surveillance system for the surveillance team to review and analyse.
AI can also isolate cases where stock prices are artificially managed by certain counters even as other securities and the broad markets fluctuate. This will cancel out false negatives in the surveillance reports and in this way reduce the market noise and increase the value of trading queries and alerts.
Tan Boon Gin, CEO of SGX RegCo stated:
SGX RegCo’s focus on targeted regulation extends beyond the way we deploy our established regulatory tools to the development of technology to enhance our surveillance activities. The successful use of AI to generate higher quality alerts affirms that investing in new technology can result in increased efficiencies and better outcomes for investors and the market.