On December 28, Kazakhstan Stock Exchange (KASE) entered an agreement deal with the Swedish software developing company, Scila AB to use the Scila surveillance technology solution to combat unfair practices in the exchange market.
Scila AB, a major software firm based in Stockholm, Sweden, offers surveillance software solutions for financial institutions. It serves firms in industries including regulatory authorities, hedge funds, major exchanges, small brokerages and large investment banks.
The Kazakhstan Stock Exchange agreed to use Scila surveillance solution to counteract cases of attempted market manipulation, insider trading and other market abuse. The exchange joins a series of global exchanges, including the Cyprus Stock Exchange, Vienna Stock Exchange, Deutsche Börse, New York Stock Exchange and London Stock Exchange, which use the Stockholm-based firm’s solution.
Alina Aldambergen, the Chair of KASE's Management Board, talked about the development: "The chosen system will allow the Exchange to reach a qualitatively new level of protection of the local market from manipulation. The use of the latest technologies in the field of financial services expands the capabilities of participants, raises the level of service standards and, accordingly, the requirements of the market as a whole."
Meanwhile, Lars-Ivar Sellberg, the Executive Chairman and one of Scila Co-Founders, also commented about the development: "Kazakhstan is the largest economy in Central Asia and a leading capital market in the region. KASE offers a wide range of products and instruments in various asset classes, and we look forward to a long-term partnership with KASE."
Scila Surveillance is a high-tech solution for real-time surveillance, which many companies are using at their business facilities in more than 20 countries. Market participants, regulators and trading avenues use the solution to detect and present evidence of market abuse and maintain market integrity as well as build investors’ trust. The solution monitors traditional market abuse like layering, spoofing and insider trading on top of high-frequency trading based on various trading statistics and best execution compliance .
The surveillance solution covers asset classes such as foreign exchange, energy and emissions, fixed income, commodities, equities and derivatives, and the money market. Its market coverage includes voice trading, over the counter (OTC) trading off-exchange, continuous trading on exchange, request for quotes (RFQs) and auctions.
Insider Trading In the Stock Market
This development by The Kazakhstan Stock Exchange comes at a time when most US citizens believe that the stock market is rigged, and they are right. Market abuse happens on Wall Street and is common among corporate executives. Nobody, not the Justice Department, not the regulators, and not the companies themselves, is doing anything to stop it. For instance, insider trading refers to trading in securities like bonds and equities by company insiders who have access to exclusive information about the issuer of particular securities before such information is released to the general public. This allows insiders to benefit from selling or purchasing shares before they fluctuate in price. Such market abuse is common and practised by various regulatory authorities, corporate officers and market participants.
Primary insiders gain access to this information by virtue of their responsibility, employment or position in their company. They include controlling shareholders, corporate officers and executives, and financial market professionals who compile company information. Government officials who have access to insider information are also included in this category. Secondary insiders are relatives and friends of the primary insiders. In order to minimize the likelihood and risk of insider trading and market manipulation, organisations like Scila AB help to introduce effective protection. Potential compliance measures include policies, appropriate sanctions, awareness training, monitoring mechanism and reporting systems.
