Hong Kong Exchanges and Clearing Deploys Nasdaq SMARTS

Nasdaq Inc. has announced that Hong Kong Exchanges and Clearing Limited (HKEX) is the first exchange customer in Asia to successfully deploy Nasdaq SMARTS Market Surveillance’s latest machine learning and participant relationship discovery technology across its equity market, enhancing its capabilities to safeguard market integrity, and better protect investors. Nasdaq has worked with HKEX’s Market Surveillance team in implementing machine learning to analyze unusual trading activities and their subsequent categorization by surveillance analysts. The aim of these algorithms is to predict which actions analysts are likely to take based upon their handling of historical activity, as well as discovering new relationships within the data. The machine learning capabilities will initially be used to prioritize the surveillance workflow. The technology predicts the likelihood that the event will lead to an action by an analyst. This will particularly help in situations where work load is high, such as during the opening and closing of the markets. The new prioritization ranking is then used to complement traditional quality controls in relation to alert handling, which then enables surveillance officers to identify outliers where the actual handling of alerts has differed from the prediction of the algorithm.