Monitoring FICC markets and the impact of machine learning

Market surveillance in FICC has undergone, and continues to undergo, significant change as a result of regulation, the evolution of market structure, and technological developments. This Spotlight Review considers these structural and technological changes, in particular the emergence of machine learning trading strategies, and sets out some of the challenges associated with these developments for surveillance teams in FICC markets. The review then examines the role of technology as a potential solution to these challenges, creating as it does opportunities to improve market surveillance through the application of machine learning.

This Spotlight Review outlines:

  • factors driving the pace of change in market surveillance;
  • the acute impact of data on surveillance effectiveness;
  • surveillance of complex algorithms and machine learning;
  • employing machine learning to empower surveillance; and
  • the vital role agility plays in effective surveillance.

Last updated 3 August 2020