France’s financial markets regulator, the Autorité des Marchés Financiers (AMF), today said it will implement a new market surveillance system for the country’s financial market, dubbed the ‘ICY system’. The system was developed internally with the backing of IT company Neurones, and will be rolled out gradually effective from the second half of 2017.
The French regulator says the new monitoring system is in line with its commitment to investor protection and to ensure a fair and orderly market as well as a more facilitative trading environment for investors.
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The ICY system, the name a play on the words ‘I see why’, will allow swifter implementation of changes in EMIR regulation for over-the-counter derivative trading. Additionally, the custom-built system, which will start receiving MiFID II data from January 2018, will be able to handle the continued increase in AMF’s duties with its system currently analysing nearly 1.6 million transactions and generating – on average – 36,000 alerts annually.
The new market surveillance system is designed to capture transactions in real time, root out market irregularities, and automatically adjust certain detection models, says the AMF. The ICY system processes significant volumes of market information in real-time for the watchdog to detect market manipulation and also includes tools that allow AMF analysts to make sense of the vast amounts of data for investigative purposes.
The system will be able to archive data and perform multivariate analysis, as well as adding innovative new functions to help the AMF identify behaviour patterns rapidly. It also includes a comprehensive set of artificial intelligence tools that have the capability to promptly reconstruct activities of the market as it occurs, allowing each transaction to be closely reviewed.
Alexandra Givry, Head of the Market Surveillance Department, commented: “Financial markets are increasingly automated and fragmented. In this environment, detecting insider trading and market manipulation requires sophisticated, innovative tools able to decrypt complex, unstructured data. ICY will enable the AMF to exploit the large amounts of available data and thus better execute its market surveillance and investigation activities. It will also strengthen its capacity to analyse market trends and the impact of regulation”.