How do I ensure my post-trade surveillance with a trade surveillance platform is compliant?

To make your post-trade surveillance compliant using a trade surveillance platform, you need more than just good technology—you need a well-governed program around it. A compliant setup usually includes these elements:

1. Define your regulatory obligations first

Map your surveillance to the rules that apply to your business, such as:

• Market abuse / manipulation rules
• Best execution and trade reporting obligations
• Recordkeeping requirements
• AML / sanctions / fraud controls where relevant
• Rules from your local regulator, exchange, and any cross-border venues you trade on

A platform is compliant only if it is configured to detect the behaviors your specific obligations require.

2. Maintain a risk-based surveillance framework

Document:

• Which markets, products, desks, and entities are in scope
• Which behaviors are monitored
• Why those behaviors are relevant to your risk profile
• How thresholds, alerts, and exceptions are set

A regulator will usually expect a risk-based rationale, not a one-size-fits-all approach.

3. Ensure data quality and completeness

Most surveillance failures come from bad data. Make sure you have:

• Complete trade, order, cancel, amend, and market data
• Accurate timestamps with proper synchronization
• Clean reference data for clients, instruments, venues, and accounts
• Controls for missing, late, duplicate, or corrupted data

You should regularly test data feeds and reconcile the platform against source systems.

4. Calibrate scenarios and thresholds properly

Configure alert logic based on:

• Historical trading patterns
• Expected legitimate behavior
• Product and venue characteristics
• False positive/false negative tradeoffs

Document all changes to scenarios and thresholds, including approvals and testing. Avoid “set and forget.”

5. Establish formal alert review and escalation procedures

A compliant process should define:

• Who reviews alerts
• Review timeframes
• Triage criteria
• Escalation levels
• When compliance, legal, or investigations are involved
• When a case is closed, remediated, or reported externally

The platform should support an auditable case workflow.

6. Keep a strong audit trail

You need evidence of:

• Original data inputs
• Alert generation logic
• Reviewer actions and comments
• Case dispositions and rationale
• Escalations and approvals
• Model/scenario tuning changes
• User access and permission changes

If it isn’t documented, it’s hard to defend in an exam or investigation.

7. Perform regular testing and validation

At minimum, test:

• Scenario effectiveness
• Alert quality and coverage
• Data integrity
• Access controls
• Business continuity and recovery
• Change management
• Periodic independent validation of the surveillance program

You should be able to show the platform works as intended and remains suitable over time.

8. Apply strong governance and accountability

Assign clear ownership for:

• Surveillance policy
• Scenario management
• Data feeds
• Investigations
• Regulatory reporting
• Periodic reviews

Have management oversight, documented committees, and escalation routes for unresolved issues.

9. Manage third-party/vendor risk

If you use a vendor platform, confirm:

• Contractual responsibilities are clear
• You retain ultimate accountability
• The vendor supports your regulatory requirements
• SLAs, support, and incident response are documented
• Security and privacy controls are adequate
• You can export data and evidence if needed

Regulators generally won’t accept “the vendor handles it” as a defense.

10. Train users and reviewers

Make sure staff understand:

• The surveillance purpose
• How to review alerts
• How to document decisions
• When to escalate
• Signs of manipulation or misconduct

Training should be role-based and repeated periodically.

11. Test for regulatory alignment and local rules

If you operate across jurisdictions, confirm the platform accommodates:

• Different reporting formats
• Venue-specific rules
• Local data retention periods
• Cross-border privacy and transfer restrictions
• Language and time-zone issues where relevant

12. Retain records for the required period

Make sure records are kept according to the longest applicable retention rule for:

• Trades and orders
• Alerts and case notes
• Communications
• Approvals and tuning changes
• Surveillance reports and validations

Practical compliance checklist

You’re in a much stronger position if you can answer “yes” to these:

• Do we know exactly which regulations our surveillance supports?
• Are the monitored scenarios documented and risk-based?
• Is our data complete, accurate, and time-synchronized?
• Can we explain why each threshold exists?
• Are alerts reviewed promptly and consistently?
• Do we have a full audit trail?
• Have we validated the system and scenarios recently?
• Do we retain evidence for the required period?
• Is accountability clearly assigned?
• Can we demonstrate ongoing governance to regulators?

Important note

A trade surveillance platform can help you comply, but the organization remains responsible for the surveillance program as a whole. Compliance depends on policy, governance, data, testing, documentation, and human oversight, not just software.

If you want, I can also give you:

1. a compliance checklist template,
2. a policy framework for post-trade surveillance, or
3. a control matrix mapped to common regulatory requirements.