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APAC: The Surveillance Requirement Dilemma

APAC: The Surveillance Requirement Dilemma

“As we grow our virtual asset trading business, what type of surveillance do we require?” It is a question we consistently hear from prospects in the APAC region. We know that regulators generally want to shine a light on virtual asset service providers (VASPs) by requiring registration and compliance with relevant local regulations. With over 200 venues in Korea alone, regulators there recently issued a stern warning as not a single provider has yet registered under the requirements of the Financial Transaction Reporting Act. Meanwhile, the Securities & Futures Commission of Hong Kong’s (SFC) 2019 position paper clearly lays out the regulatory approach for VASPs in Hong Kong, including the requirements to monitor transactions for AML/CFT risks, and to properly surveil for market manipulation and abusive trading activities. The Monetary Authority of Singapore (MAS) has issued similar guidance in promulgating its registration regime for VASPs. In fact, after a quick glance at their application for approval to operate an exchange, MAS is clearly looking for exchanges to monitor for both AML/CFT risks and the gamut of abusive trading activities.

It has become increasingly clear that VASPs looking to compete are proactively building their compliance programs and surveillance tools. Exchanges are focused on ensuring their markets are safe for public participation and institutional investment. They are doing this by being transparent with regulators and legislators, forming a number of working groups to share ideas and help create an appropriate regulatory regime for this growing market, and of course, building their compliance tools to grow with their business. The adoption of appropriate compliance and surveillance tools is well underway in the APAC region and globally, and critical to the success of any virtual asset exchange.

ViP:  With four of the top six crypto exchanges on CB Insights’ Blockchain 50 list using the Validus platform, Eventus has significant experience providing a post-trade surveillance and transaction monitoring solution.  Validus offers multiple deployment options and customizable procedures that can be tailored to a client’s facts and circumstances. It can operate in real-time and/or T+1, on-premise or in the cloud.  Validus scales to handle billions of messages a day, in real-time. We offer 200+ configurable, adaptable procedures that cover transaction monitoring and trade surveillance needs, provide a fully developed python integration for customization, and handle cross-market surveillance natively. Our automation functionality and machine-learning capabilities are critical in reducing the number of false positives, and our statistics capabilities create bespoke analytics for anomaly detection.  


About Eventus Systems

Eventus Systems is a leading global provider of multi-asset class trade surveillance and market risk solutions. Its powerful, award-winning Validus platform is easy to deploy, customize and operate across equities, options, futures, foreign exchange (FX), fixed income and digital asset markets. Validus is proven in the most complex, high-volume and real-time environments of tier-1 banks, broker-dealers, futures commission merchants (FCMs), proprietary trading groups, market centers, buy-side institutions, energy and commodity trading firms, and regulators. The company’s rapidly growing client base relies on Validus and Eventus’ responsive support and product development teams to overcome its most pressing regulatory challenges. For more, visit www.eventus.com.