Surveillance systems

Oslo Børs has used the SMARTS electronic surveillance system since 1999. This system has significantly improved the surveillance function through its detailed monitoring and visualisation of trades. SMARTS is an advanced system that monitors all trading in real time and provides alerts and reports in the event of various types of unusual activity. This includes abnormal price changes, unusual activity by brokers, changes in volume and breaches of the trading rules.

Many of the cases that Oslo Børs refers to The Financial Supervisory Authority of Norway (including cases where the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime subsequently takes action that leads to fines, prosecutions and convictions) are initiated by surveillance system alerts.

Data analysis and visualisation

SMARTS is made up of a number of modules that process the data it collects to make it easy to understand and analyse. This information can then be used for purposes such as evaluating the extent to which a particular event is abnormal, and identifying the parties involved. Powerful graphical modules provide unique insight into complex events.

Alerts for different types of securities

SMARTS also features a module that makes it possible to design and program alerts. These alerts form an integrated part of the surveillance system and work in real time. The system's alerts address most areas, including pricing, activity, behaviour, reporting and rules. The alerts are designed in response to the particular characteristics of various types of securities, recognizing for example that a stock that normally has a high volatility will have a higher threshold than a stock with low volatility. The Market Surveillance Department processed on average 200 alerts a day in 2008, and 150 alerts are in production in the system.

Custom developed systems

Oslo Børs has developed several computer systems to support the market surveillance function. These include systems for:

  • logging events
  • use of the instruments available for the regulation of price quotation
  • intensified surveillance
  • initiating investigations
  • recording surveillance practice
  • case management, including systems for identifying participants that are repeatedly associated with identified cases
  • search tools that identify patterns of investor and broker behaviour using the VPS (Central Securities Depository) databases
  • capture and analysis of Internet information.

These systems supplement the alerts and metrics provided by the SMARTS surveillance system. In addition, Oslo Børs operates a separate register of insiders to monitor compliance with the reporting duties that apply to primary insiders. In addition, the Department has access to various official databases such as those held by the Brønnøysund Register Centre, the Population Register and the Employer/Employee Register.The department routinely records telephone conversations relating to its operational investigations. Oslo Børs has access to information from many sources in its surveillance function, and is authorised by the Data Inspectorate to process such information as part of its statutory control and surveillance duties 

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Market surveillance