18 June 2007

Detica, the business and technology consultancy, has been chosen by the FSA to help combat the growing problems of market abuse and insider trading. The FSA will exploit Detica's expertise in information intelligence as the authority enhances its capability to detect and pursue market abuse by upgrading its Sabre markets monitoring system.

Market surveillance has been made more demanding by the rise of algorithmic trading, complex derivative products and cross-border trading. Regulators believe they should shift their attention from individual to institutionalised wrongdoing, a fact supported by research which shows nearly 50% of market abuse is perpetrated by corporate insiders⁽¹⁾.

Trapping institutional traders who are insider dealing is increasingly difficult as their activities are hidden in huge volumes of daily investment transactions. In developing SABRE II, Detica will be taking on the formidable challenge of analysing, in real-time, trading across a diverse range of financial instruments and markets.

In addition to generating alerts based on known models of suspicious behaviour, SABRE II will also enable investigators to discover longer-term illegal trading patterns buried in the data. This will be underpinned by Detica NetReveal™ technology which provides an advanced forensic analysis facility. As Simon Asplen-Taylor Head of Market and Regulatory Services in Detica, concludes: "At the end of the day this is all about intelligence. Intelligence in the sense of gaining a better picture of both individual and institutionalised market abuse, and intelligence in terms of taking a more enlightened approach to cracking this problem."

The FSA has also selected Detica to help them reach the MIFID deadline of 1st November 2007 for exchanging relevant transaction reports with its European counterparts. By the very nature of its design, SABRE II will support the principle of continuous improvement, helping the FSA to carry out its statutory role more effectively, in what is a rapidly changing business environment and regulatory landscape.

"What strikes you most about this is the sheer scale and complexity of the project, combined with an absolute go-live date of 1st November for the MiFID element of the project", comments Simon Asplen-Taylor. "The FSA has clearly invested a huge amount of trust in us."

 

Sally Clift or Rachel Ringstead Porter NovelliTel: +44 (0)207 853 2222email: or