SMARTS Platform

Trading has evolved rapidly over recent years both globally and in Canada. New marketplaces, new participants, and new technologies and tools aimed at modernizing investing and trading mean that CIRO, like other regulators, must continue to keep pace. We have also continued to see a dramatic growth in the speed and volume of trading, as well as the emergence of other innovations such as crypto-assets. Even more explosive is the growth in “messages”, which include quotes, orders and cancellations in addition to trades themselves.

CIRO has invested in Nasdaq’s state-of-the-art technology, SMARTS, to facilitate efficient oversight by CIRO’s Market Surveillance teams. The SMARTS platform is customized for CIRO, with rich features including cross-asset monitoring capabilities. CIRO directly manages and maintains the SMARTS system.

Using SMARTS, CIRO’s Market Surveillance teams can quickly detect trading anomalies across multiple products, individual traders and firms, and identify and respond to emerging trends in an efficient manner.

The role of alerts in surveillance

CIRO’s Market Surveillance teams use alerts incorporated into the SMARTS platform by Nasdaq, which have been modified for the Canadian markets. We also design our own alerts and integrate them into the SMARTS platform to monitor trading for unusual activity. When triggered, the alerts point to trading patterns that CIRO staff can analyze and further investigate if necessary. Alerts can be set using algorithms to identify unusual patterns in prices or volumes, as well as to flag indications of possible rule infractions.

The SMARTS platform has the flexibility to allow CIRO analysts to design new kinds of alerts, including those with the ability to track trading activity across multiple marketplaces in a single window.