Corvil today announced the launch of a new solution that establishes a system of traceability to Coordinated Universal Time (UTC), a critical capability for monitoring, analysing and reliably reporting activity on electronic trading networks.
This is now a mandatory requirement for businesses to comply with pending financial regulations such as MiFID II from the European Securities and Markets Authority (ESMA) and the Consolidated Audit Trail (CAT) from the US Securities and Exchange Commission (SEC). This capability also extends and is necessary to assure accountability, auditability, and performance in algorithmic and AI environments.
Rapidly deployable and providing continuous assessment of clock synchronisation stability, Corvil’s UTC Traceability Solution provides business, technology, and compliance teams with precise visibility, quantitative analysis, and insight into computer clock accuracy compared to the UTC reference. It provides an independent, continuous assessment, and record of UTC synchronisation integrity and automatically provides alerts when clock synchronisation is not compliant. The solution also provides automatically generated reports for clock synchronisation quality, saving time and reducing risk associated with MiFID II and CAT compliance.
The consistency and integrity of time across computer systems is an increasingly important aspect of providing transparency into the business transactions executed across those systems. The speed and automation of today’s financial markets and other industries makes it challenging to measure performance, determine causality and establish an accurate, sequenced forensic record of what has transpired.
As regulators look to recreate markets, they have mandated greater precision, oversight, and auditability of clock synchronisation. To that end, both ESMA and the SEC will soon require trading venues and market participants to have a system of traceability to UTC in place for all reportable events within the trading network.
Supplementing its existing solutions for real-time monitoring, surveillance, and precision timestamped order record-keeping, Corvil now tracks variability to UTC. Corvil’s UTC Traceability Solution delivers an independent, continuous assessment and record of UTC synchronisation integrity, which provides firms the insight and information to meet the obligations of MiFID II (RTS 25, Article 4), and CAT Reg 613. Reporting on variances more granular than the level of current regulations, it is also expected to address the tightening of future compliance requirements.
Corvil’s new offering enables businesses to rapidly respond to issues or outages by alerting when there is any loss or disruption of clock synchronisation. It also identifies messages whose timestamp accuracy may be suspect so customers have a record of the affected transactions for closer examination, auditability, risk mitigation, and regulatory reporting purposes.
“As we shift to a world run by algorithms and artificial intelligence, there is a new reality of time that we must understand to provide oversight of what transpires digitally,” said David Murray, Chief Marketing and Business Development Officer. “Financial markets have moved first to regulate the precision by which time and events are captured within trading networks to help increase transparency and surveillance. Corvil’s UTC Traceability Solution provides an important capability for compliance with new regulations, but can be effectively applied beyond financial regulations by any company looking to monitor and assure critical business activity on their networks.”
Customers already relying upon Corvil’s compliance solutions have realised the following benefits:
• An investment firm reduced risk and accelerated their compliance timeline by three months by deploying Corvil to replace bespoke and manual processes dependent on system logging for UTC traceability.
• A multinational bank is leveraging their MiFID II investment in Corvil not only to meet compliance requirements for tracking order flows and for timestamped order record-keeping across multiple asset classes, but to also improve understanding of their clients’ experience leveraging Corvil’s analytics.
• A regional bank minimised complexity and reduced their planned cost meeting, while maintaining their MiFID II order record keeping and UTC traceability compliance requirements through their Corvil deployment.
• Validating the capacity requirements under MiFID II RTS 7 presented many challenges for one European exchange. The difficulties lay in monitoring a simulated environment operating at twice the historical peak message rates with enough granularity to accurately assess capacity utilisation. Corvil was deployed to capture and analyse every order and market data message under those conditions to simplify and accelerate the exchange’s compliance efforts.
Available this month, the Corvil UTC Traceability Solution is rapidly deployable, creates zero performance impact on systems or networks, and leverages the Corvil machine-time analytics platform, already widely used and trusted across the largest venues and market participants. For more information, please visit Corvil’s UTC Traceability for MiFID II and SEC CAT page.