The importance of conditional parameters for trade surveillance

One of the biggest challenges for firms hoping to implement a robust trade surveillance solution is managing a high volume of false positive alerts. When alert parameters and thresholds are not set properly, swathes of false positives (and false negatives) can overwhelm compliance teams, increasing the risk of alert fatigue, leading to real instances of market manipulation to go unnoticed.

One of the most effective ways of ensuring that you minimise false positives is implementing a system with conditional parameters. Conditional parameters provide users with the ability to set alert thresholds dynamically: rather than setting static thresholds, conditional parameters can automatically adjust to account for variables such as market volatility, instrument liquidity, or client type, distinguishing between activity driven by natural market fluctuations and those which may be suspicious.

eflow TZTS Trade Surveillance system includes conditional parameters as standard. Learn more about TZTS here.