Compliance revolution?

Interview: Tradair in an Era of Surveillance

Tradair's Brian Andreyko discusses technology, trading and regulation in an interview with Finance Magnates.

After five years of operations, Tradair now has a tried and tested infrastructure on which to build bespoke, front-end, FX trading technology solutions for banks and brokers. Just recently, the software provider announced the release of its new live surveillance and regulatory compliance tool.

Finance Magnates caught up with Tradair’s Brian Andreyko in New York to find out more about its new tool and, more generally, how it relates to the regulatory demands the industry now faces.

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A Burgeoning Industry

Firms are scrambling to upgrade their compliance and surveillance capabilities ahead of looming legislative deadlines.

Following the sordid LIBOR and FX fixing scandals, a more aggressive regulatory approach to insider trading and other types of financial fraud has emerged, which is clearly evidenced in high fines and new rules.

As such, real-time trade data analysis, which pro-actively monitors markets and trading behavior, is now a necessity. Consequently, firms are scrambling to upgrade their compliance and surveillance capabilities ahead of looming legislative deadlines.

Tradair’s new surveillance and regulatory compliance tool therefore comes at a good time. It also comes at a time when the industry for trading surveillance and reporting technology is blossoming.

The New Tool

As previosuly reported by Finance Magnates, Tradair’s new product aims to simplify the lives of compliance departments by analyzing data and assisting companies to be prepared for current and upcoming regulatory and reporting regulations.

According to Andreyko, the software helps to improve both regulatory and operational efficiency.

Utilizing elements of big data technology, Tradair’s new tool not only provides instantaneous storage and retrieval of data but it also provides real-time BI overlays. According to Andreyko, the software helps to improve both regulatory and operational efficiency.

“The solution provides out of the box toolsets to monitor and proactively act and report upon on markets, liquidity and trading activity. The solution is also easily interfaced, and data can be exported to the client’s environment, enabling localized proprietary BI and back testing, supporting internal systems, algorithms and applications on site.”

The product is available as a standalone solution or it can ride on the back of Tradair’s existing FX trading infrastructure.

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A Holistic Approach?

While the new software utilizes and analyses all trading data, it does not quite meet the holistic approach to monitoring and reporting that regulators envision for firms.

Indeed, firms are expected to put in place broad compliance frameworks to meet the enhanced regulatory demands. While monitoring and reporting of trading data is essential, firms are also required to monitor e-communications, which Tradair’s new product does not.

However, given Tradair’s emphasis on customizing its software to meet its clients’ needs, Andreyko was quick to point out that the new compliance tool will integrate with incumbent in-house or out-of-the-box e-communication surveillance technology.

Integration is very much part of Tradair’s modus operandi. Given that Tradair does not function as an ECN, its software necessarily interfaces with liquidity providers in order to collect, store and exploit trading data.

Convergence & Competition

As regulatory requirements increasingly converge across jurisdictions, Tradair’s compliance and monitoring software will become applicable to a wider audience. Furthermore, the ease and efficacy of the software will be enhanced by regulatory harmonization (data standardization, in particular), allowing Tradair to streamline the generation of reports for regulators.

At this stage, uptake remains modest; comprised predominantly of Tradair’s existing clients who are building upon Tradair’s infrastructure. But it is still early days.

Tradair’s new technology could help reduce duplication across the industry; surely a mantra echoed by many aspirants in the industry.

As banks and brokers upgrade their compliance systems, the fight for market share is underway. Andreyko emphasised that Tradair’s new technology could help reduce duplication across the industry; surely a mantra echoed by many aspirants in the burgeoning compliance and monitoring industry.

Tradeair’s ambitions are obvious. Recently, it announced that it had been selected by Bank Leumi for the launch of their new eFX trading platform. In the beginning of the year, TradAir unveiled a $15 million equity round with the funding being pledged as growth capital to expand usage of its FX liquidity technology. And the company has recently partnered with SolidFX, which connected their ECN to Tradair’s network.

With Tradair’s entry into the realms of surveillance and regulatory compliance, this is certainly a space worth watching.

 

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