Ideal Prediction, an independent trading analysis and data science company for capital markets, has launched Scope, an automated monitoring service, which analyses the behaviours of voice traders and trading algorithms in line with the principles of the FX Global Code (FXGC).
Already in production, Scope automatically monitors order and trade activity, evidencing that humans and algorithms adhere to governance and risk controls. It specifically highlights potential issues like last look, spoofing, flashing, layering, order violations, limit breaches, and P&L flags.
The FXGC was launched in May 2017. It is a set of global principles, developed in partnership by Central Banks and Market Participants to provide a common set of guidelines, which promote the integrity and effective functioning of the wholesale FX market. Market Participants are expected to review the behaviours of humans and algorithms, embed the principles into their day-to-day operations, sign a commitment to the FXGC, and post such evidence on public registers.
“Since the release of the FXGC, our firm has focused on evidencing adherence to the principles, but the service additionally helps senior management sleep at night,” says John Crouch (pictured), Founder and CEO of Ideal Prediction. “Clients specifically value the independence of our service, in addition to our analytics technology and high-frequency trading expertise.”
Ideal Prediction is further refining Scope, by adding checks that are collaboratively defined and agreed. It is working with a group of top tier banks, to create collective standards.
Crouch adds: “Not every check has a clear definition, so we collaborate with the FX community to provide standardised as well as custom checks appropriate to each firms’ business.”