FSA taps Nasdaq to help tackle market abuse
LONDON, Sept 10
LONDON, Sept 10 (Reuters) - The Financial Services Authority (FSA) has struck a deal with Nasdaq OMX to use the exchange's system for spotting market abuse, in a move that prepares the British watchdog for draconian European reforms.
The partners said on Monday the FSA has selected Nasdaq's Smarts Integrity software system to boost its ability to detect market abuse on regulated British markets.
"This new partnership marks an important achievement...with more than 55 percent of all European equity trading now being monitored through our software," said Paul McKeown, Vice President, market technology at Nasdaq OMX.
A spokesman for Nasdaq said another European regulator is already using Smarts but declined to name the body, citing a confidentiality agreement.
The FSA deal comes as the European Commission plans a raft of regulatory changes designed to force national regulators, like the FSA, to tighten up on abusive trading practices.
Nasdaq said the deal will allow the FSA to meet the demands of future reforms such as Markets in Financial Instruments Regulation and the Market Abuse Regulation.
European regulators are keen to clamp down on investment firms who seek to take advantage of the fragmentation of the European trading landscape over the past five years to hide abusive trading practices.
The new breed of high-speed traders has also been criticised by some banks and asset managers for using abusive tactics to glean information above rivals' trading intentions.
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