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Screenshot of a breaking news alert e-mail from Q2 2017
German software giant apparently sees a big market developing in FX monitoring in light of rate fixing scandal
German technology company Software AG (Frankfurt TecDAX: SOW) has today launched an additional service to its Apama market surveillance solution which includes alerts to signal manipulation in FX market benchmarks and rate fixing.
The additional service has been developed in partnership with tier 1 banks, at a time when the high-profile international investigation into the activities of some of the world’s key institutional market participants with regard to FX benchmark abuse is at its highest point.
In terms of functionality, the Apama service will provide compliance and market monitoring personnel with in-depth monitoring of FX trading to identify benchmark fixing, cross liquidity-venue manipulation, and other suspicious behavior. Furthermore, it enables trading institutions to customize real-time detection scenarios to meet business specific needs and to evolve surveillance in response to the latest regulatory demands.
Software AG had identified a specific business justification for purchasing the Apama brand from its previous owner, Progress Software in June last year, with a view to maximizing the value of the firm’s complex event processing platform in conjunction with Software AG’s existing low latency messaging system which, according to the company, produces sub-second response times to events are critical such as fraud detection, capital markets trading or customer experience management.
In addition, Apama complex event processing (CEP) will enable customers to fully design, test, monitor and control the industrial internet to a new level of precision and at a new level of intelligence.
It could be proffered that there is no better time to launch this particular product than during a period of time when rarely a day goes by without mention of the latest government-level development in the FX manipulation investigation, or without further banks being placed under scrutiny surrounding the allegations.
On this subject, Dr. John Bates, CTO Intelligent Business Operations & Big Data at Software AG today stated on the launch of the service: “Detecting rogue behavior or market manipulation is not a trivial task. You need a robust surveillance monitoring capability that can be calibrated to the specific trading profile of each bank. FX benchmark alerts are not generic, which means ‘off-the-shelf’ packages are rendered useless before they even begin.”
Software AG’s rapid response to regulatory concerns about FX markets has been driven, in part, by what it considers to be a deep industry and technical heritage in front office FX eCommerce trading solutions, in which Apama is an industry leader.
This unique combination of front and middle office FX trading experience ensures clients rely on Software AG to deliver Apama solutions and advise on best practices in this new frontier of regulatory scrutiny. Software AG’s Apama Market Surveillance and Monitoring solution is in use at tier one banks to monitor FX spot and FX NDF (non-deliverable forward) markets globally.
Dr. John Bates went on to say: “It is critical that you have the ability to configure your system for institutional or retail venues, electronic or voice trading, exchange or OTC (over the counter), as well as several other trading considerations. Equally, percentages and periods of trading execution can vary greatly across asset classes and accepted trading practices within firms up to, and during, the fixing/settlement point. Our approach is simple. We work closely with our clients to create the surveillance alerts that make sense for them. We are the only Market Surveillance and Monitoring solution provider that takes this approach.”
Compliance personnel can dig deep into trading anomalies and determine the root cause quickly. Alerts can also trigger processes that kick-off an investigation by automatically creating a case and launching a workflow.
Dr. John Bates continued: “Responding quickly to regulatory changes or split-second market anomalies can make the difference between being perceived as trustworthy, or as the next bank that’s in the headlines due to a trading crisis. The rise of electronic trading renders many current approaches to market surveillance and monitoring akin to chasing Ferraris on a bicycle; with the Apama solution, compliance personnel can take control, build surveillance detection scenarios and define workflows on their own terms.”