OneTick Blog

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FINRA in the Cloud & 2018 volumes

Feb 11, 2019 10:54:00 AM

By Dermot Harriss

FINRA posted a recap on the impressive 2018 market volumes (Finra's Linkedin post here)on which it performed market surveillance, and flaunts its successful commercial cloud strategy. The volume highlights are certainly impressive -- e.g. "28 of the 30 Most-Active Dates in History Occur in 4Q 2018" -- but chances are, you experienced them first hand.

For the busy TL;DRs on LinkedIn, I'll highlight a bit from further down their article:

Dynamic scalability was one of the key [reasons] FINRA moved 90 percent of its processing and storage work to the cloud. ... Adoption of the cloud strategy has made it possible for FINRA to not only stay ahead of growing volume but also perform increasingly sophisticated surveillance across U.S. securities markets.

Had FINRA stayed with [traditional data center] approach, the volume from any one of the exceptional days of 2018 could have taken days to finish processing, an effect that would compound with heavy activity in succeeding days.

What's significant here is that regulators and SROs are now becoming vocal about the fact that they've moved all the attributed data they use for market surveillance into commercial cloud environments, and they are happy with the results. Here's a brief list:

  • FINRA – ingests and runs surveillance models on 75 Bn records per day (AWS)
  • SEC – ingests and analyses billions of records per day (AWS and others)
  • CAT plan processor – anticipates 50-100 Bn records per day, ever-expanding history (IBM)
  • Nasdaq OMX – market replay function: billions per day, 10 years of history (AWS)
  • CME – various data services (AWS)

It pulls the teeth of residual arguments by bank and hedge fund IT departments that there's something intrinsically insecure about the approach. And, it heralds a tipping point for participants: soon, the reasonable question to ask won't be "do you have a commercial cloud strategy?" but "Why don't you have one?" Regulators will have diminishing sympathy for participants that try to use processing capacity limits as an excuse for late reporting or customer trade processing problems.

Some commercial vendors of sophisticated, high-volume market and trade surveillance have already moved all their operations to commercial cloud environments. For example, all of #OneMarketData's hosted OneTick Surveillance customers are hosted in a commercial cloud environment, where they benefit from virtually unlimited scalability as market volumes rise.

 

See OneMarketData for proven and cost-effective solutions.

Dermot Harriss is responsible for delivering solutions that help firms meet their regulatory compliance needs. Dermot brings over twenty years of financial industry experience from roles at Goldman Sachs, Morgan Stanley, and D.E. Shaw that included futures trading, quantitative strategy development, derivatives risk management, program trading, execution services, and technology management.

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Dermot Harriss
Written by Dermot Harriss

Dermot Harriss joined OneMarketData in 2015, and is responsible for delivering solutions that help firms meet their regulatory compliance needs. Dermot brings over twenty years of financial industry experience from roles at Goldman Sachs, Morgan Stanley, and D.E. Shaw that included futures trading, quantitative strategy development, derivatives risk management, program trading, execution services, and technology management.

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