In this recent webinar, surveillance industry experts provide an overview of the evolution of surveillance in India, the impact of SEBI's regulatory frameworks, and the increasing demand for quality surveillance systems.
In July 2024, SEBI published the new requirements to put in place an institutional mechanism for prevention and detection of market abuse, asking the stockbrokers to institutionalize the surveillance of trading activities and internal controls. The requirements put forth a staggered implementation timelines starting Jan 2025 to Apr 2026, depending on size of the stockbroker.
Later, in Dec 2024, NSE/BSE/MCX build on the SEBI’s requirements by setting out specific requirements for surveillance systems.
These regulations mark a significant shift on the surveillance measures required by exchange members – with specific requirements on having surveillance systems depending on the number of UCCs, specific alerting requirements and specific timeframes depending on their operations and size.
The circular emphasizes on the institutional mechanism for prevention and detection of fraud or market abuse that was laid out in Chapter IVA of SEBI Broker Regulations 2024. The circular further states to comply with following obligations/mechanisms laid down in Chaper IVA of the Broker Regulations:
Systems for surveillance of trading activities and internal controls
Obligations of the stock broker and its employees
Escalation and reporting mechanisms
Whistle Blower Policy
The circular indicated a risk-based, staggered manner to ensure smooth adoption and effective implementation for all the stock brokers by providing enough time for stock brokers, based on their size, for making necessary changes. Further, the stock exchanges were directed to disseminate the information among its members and work towards applicability/implementation of the provisions in the circulars.
Following SEBI’s lead on maintaining strong surveillance systems for trading activities and internal controls, exchanges issued guidance for its trading members to ensure compliance with SEBI directives, exchanges recommended best practices for an effective trade surveillance while encouraged its members to assess the complexity of their operations and maintain strong monitoring/investigation processes.
SEBI laid down regulatory requirements for implementation of surveillance of trading behavior by exchange members and detection of any unusual activity. Based on the regulation, trading members with more than 2000 UCCs were asked to mandatorily have an automated system driven alert generation in place. This should consider the complexity of the transactions and business activities.
The general requirements are to cover comprehensive alerts to analyze trends and patterns from different themes. Qualified Stock Brokers (QSBs) are subjected to enhanced monitoring and surveillance including additional submissions to SEBI and MIIs, as and when needed.
Nasdaq Trade Surveillance is a comprehensive market monitoring tool that automates the detection and analysis of potentially abusive or disorderly trading activities. Trusted by leading financial institutions and exchanges, NTS plays a crucial role in maintaining market stability and is specifically designed to adapt to the evolving regulatory landscape.
Nasdaq Trade Surveillance is a comprehensive market monitoring tool that automates the detection and analysis of potentially abusive or disorderly trading activities. Trusted by leading financial institutions and exchanges, NTS plays a crucial role in maintaining market stability and is specifically designed to adapt to the evolving regulatory landscape.
Our platform continuously monitors market activities, providing instant alerts for any suspicious transactions.
Generate detailed reports that meet regulatory standards, ensuring accurate and timely submissions.
Tailor alerts to your specific needs, allowing you to focus on the most critical aspects of your operations
Navigate the platform with ease, thanks to its intuitive design and user-friendly features
Connect directly to Indian exchanges to ensure swift time to market for comprehensive coverage of the key surveillance requirements within the required timeframes
Expand with growth in volumes and clients and growth in other markets globally such as US equities and options markets
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Yes. Throughout our almost 30-year history, we have continued to innovate and adapt our technology to effectively monitor new markets and asset classes. Our coverage now spans over 200 markets and 300+ behaviors – spanning multiple asset classes and markets, including crypto.
Nasdaq Trade Surveillance is one of the most robust surveillance tools on the market. Nasdaq Trade Surveillance presents a far-ranging suite of features, preparing you to track crime across multiple regions and asset types by looking at all market and trading data – never sampling. Nasdaq Trade Surveillance also benefits from Nasdaq’s unique position as a longtime global operator of numerous exchanges and the expertise garnered from monitoring our own 28 markets.
Surveillance is increasingly moving from an optional, but pragmatic, component to an essential need. Being proactive about surveillance means not only will you be less likely to incur a costly fee down the line, but you will also deter financial misdeeds within your firm, ensuring that your employees are adhering to regulatory guidelines and preventing potential reputational damage.
Nasdaq Trade Surveillance is a comprehensive trade surveillance platform with global coverage across over 200 markets, and supports over 25 merchant banks and HFTs across India.
