Derivatives market operator IntercontinentalExchange Inc. (ICE) has brought on board a new cop to police its derivatives markets, amid increased regulatory scrutiny of the sector.

The partnership with Sydney-based Smarts Group gives the exchange operator new tools to monitor potential malfeasance and recreate specific market events on its U.S., U.K. and Canada markets, according to ICE officials.

ICE is ramping up trading oversight as regulators sift market data to determine the factors behind the tremendous volatility of the May 6 trading session, when moves in stock index futures were said to play into a rapid decline in equity prices.

The company--which hosts half of the world's trading in crude oil futures contracts--has also come in for greater regualtory oversight as Washington D.C. authorities scrutinize the role of speculative traders in commodity markets.

The agreement with Smarts adds the company's market surveillance platform to ICE's current monitoring activities. Last fall ICE tapped Netezza Corp. (NZ) to underpin the company's regulatory compliance and reporting.

Applying Smarts' tools across all of ICE's futures markets will automate many oversight duties, according to ICE.

Alerts can be set up to announce odd movements in contract prices, and the event playback feature could be used to help regulators detect nefarious traders at work in the market, according to the company.

Smarts also provides surveillance tools to BATS Global Markets, operator of electronic stock markets in the U.S. and Europe.

-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117; jacob.bunge@dowjones.com
Diebold Nixdorf (NYSE:DBD)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Diebold Nixdorf Charts.
Diebold Nixdorf (NYSE:DBD)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Diebold Nixdorf Charts.