SGX RegCo Enhances Market Surveillance with Artificial Intelligence – Regulation Asia

Source: artificial intelligence

The introduction of AI will help isolate unusual activity by learning from historical trading patterns and filtering out noise.

SGX RegCo (Singapore Exchange Regulation) is applying artificial intelligence (AI) enhancements to its real-time monitoring system to improve the effectiveness of its surveillance and regulation.

“The introduction of AI can help to better isolate unusual activity, by learning from historical trading patterns and filtering out noise caused by developments across intricate relationships between multiple markets,” SGX RegCo said in a statement.

“This allows regulatory attention to be more sharply focused on a smaller set of potentially unusual trading signals identified through the surveillance system, which are then further analysed and reviewed by the surveillance team.”

According to the statement, the AI can also flag instances where stock prices are being artificially maintained relative to other securities and the broader markets, which will help eliminate false negatives in SGX RegCo’s surveillance reports, reduce market noise and increase the value of trading queries and alerts.

“SGX RegCo’s focus on targeted regulation extends beyond the way we deploy our established regulatory tools to the development of technology to enhance our surveillance activities,” said SGX RegCo chief executive Tan Boon Gin.

“The successful use of AI to generate higher quality alerts affirms that investing in new technology can result in increased efficiencies and better outcomes for investors and the market.”