The Financial Industry Regulatory Authority said Thursday that it processed “an unprecedented” amount of market activity through the first six months of 2018, averaging a record 57.9 billion electronic records per day during the period — a 62% increase over the average daily volume in 2017.
Robert Cook, FINRA’s president and CEO, said in announcing the market activity that “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.”
FINRA’s “pioneering cloud strategy has allowed it to handle the record-setting volume smoothly while performing vigorous regulatory oversight of securities trading,” the broker-dealer self-regulator said.
Some of the most volatile markets in years, along with nearly 101 billion electronic messages coursed through FINRA’s regulatory platform in a single day — nearly triple the average daily volume experienced in 2017.
All of the 10 highest-volume days on record have occurred in 2018, with four of them in a single week: the exceptionally volatile week of Feb. 5, FINRA said.
“Processing and analyzing this record activity efficiently and effectively is essential for FINRA to do our job of protecting investors and ensuring market integrity,” Cook said.
Trading activity in the stock, options and fixed income markets creates a variety of electronic records that FINRA monitors for regulatory purposes.
On a daily basis, FINRA said that it receives order and trade data regarding 41,000 investment products from 17 securities exchanges, more than 60 alternative trading systems and almost 1,400 broker-dealer firms. Because these data come in different formats, staff “normalizes” them to create a single, virtual view of the market for any given security.
Analysts run almost 200 algorithmic “patterns” to look for more than 300 potential threat scenarios including market manipulation, customer protection, market conduct, trade reporting or other violations and to monitor 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,” said FINRA Chief Information Officer and Executive Vice President Steve Randich.
“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.”
(A petabyte is 1 million gigabytes.)
The self-regulator states that “dynamic scalability” was a key factor FINRA considered when it decided in 2014 to move 90% of its processing and storage work to the cloud by the end of 2016.
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