The Financial Industry Regulatory Authority (FINRA) reported a 62 percent increase in daily market activity in the first six months of 2018 compared to the same period a year earlier.
FINRA saw a record 57.9 billion electronic records per day, on average, during the period. This has been one of the most volatile markets in years, said FINRA. As many as 101 billion electronic messages have come through FINRA’s regulatory platform in a single day, which is nearly triple the average daily volume experienced in 2017. Further, the 10 highest-volume days on record have occurred this year, with four of them occurring the week of Feb. 5, the same day the Dow plunged 1,175 points.
FINRA says it’s cloud strategy enabled it to handle the record-setting volume without issue.
“Processing and analyzing this record activity efficiently and effectively is essential for FINRA to do our job of protecting investors and ensuring market integrity,” FINRA President and CEO Robert Cook said. “Cloud storage and processing have made it possible for FINRA to not only stay ahead of growing volume but also perform increasingly sophisticated surveillance across U.S. securities markets.”
Trading creates a variety of electronic records that FINRA monitors for regulatory purposes. FINRA receives order and trade data every day about 41,000 investment products from 17 securities exchanges, more than 60 alternative trading systems, and almost 1,400 broker-dealer firms. This data all comes in different formats, so FINRA staff creates a single, virtual view of the market for any given security. Analysts run some 200 algorithmic “patterns” to look for potential threat scenarios like market manipulation, customer protection, market conduct, trade reporting or other violations. They also look for insider trading.
“With a traditional data-center approach, capacity is limited to that of the servers in a data center. Had we stayed with that approach, the volume from any one of these exceptional days could have taken us days to finish processing,” FINRA CIO and Executive Vice President Steve Randich said. “With cloud storage and processing, our staff has access to petabytes of data in seconds or minutes, even during consecutive days of record-breaking activity.”
In 2014 FINRA decided to move 90 percent of its processing and storage work to the cloud by the end of 2016.
“As a self-regulatory organization we can – and as illustrated in this case, we did – make multi-year investments that support an innovative regulatory approach,” Randich said. “We are committed to continue looking past the next corner to be ready for the road ahead.”