CFTC Bolsters Oversight with Nasdaq Surveillance Technology

Key Takeaways

• CFTC Modernization: The agency is replacing its outdated ’90s-era system with Nasdaq’s advanced Market Surveillance technology to strengthen oversight and fraud detection.
• Cross-Market Monitoring: The platform provides automated alerts, cross-market analytics, and real-time order book data across traditional and digital asset classes.
• Regulatory Push: Acting Chairman Caroline D. Pham framed the upgrade as part of a broader effort to transform the CFTC into a “21st century regulator.”
• Nasdaq Partnership: Nasdaq, already serving over 50 exchanges and 20 regulators globally, brings its market integrity technology to U.S. derivatives oversight.
• Digital Asset Focus: The CFTC is preparing for expanded responsibilities in crypto markets, with surveillance capabilities designed to detect manipulation and abuse in both traditional and emerging asset classes.

Deep Dive

The Commodity Futures Trading Commission (CFTC) is taking a major step toward modernizing its oversight capabilities by deploying Nasdaq’s advanced market surveillance technology. The move upgrades the agency’s decades-old legacy system with cross-market monitoring and automated fraud detection tools designed to protect U.S. derivatives markets.

The adoption of Nasdaq Market Surveillance marks a fulfillment of Acting Chairman Caroline D. Pham’s March pledge to secure a next-generation surveillance system as part of her broader modernization push. The platform, already in use by over 50 exchanges and 20 regulators worldwide, delivers cross-market analytics and automated alerts to flag suspicious activity across both traditional and digital asset markets.

“As our markets continue to evolve and integrate new technology, it’s critical that the CFTC stays ahead of the curve,” said Pham. “Nasdaq Market Surveillance will, for the first time, provide the CFTC with automated alerts and cross-market analytics that will benefit each of the CFTC’s operating divisions and better protect our markets from fraud, manipulation and abuse.”

She emphasized that the new technology will not only improve market integrity but also efficiency: “This suite of solutions will also improve efficiency in analyzing market trends and identifying unusual or disruptive trading activity so that our lean and talented staff can take appropriate action more quickly. It’s the latest example of our work in recent months to bring about the transformation and optimization necessary to make the CFTC a 21st century regulator.”

For Nasdaq, the partnership highlights its dual role as both a market operator and a technology provider.

“Today’s financial markets demand advanced surveillance technology that can adapt to rapid regulatory evolution and emerging asset classes,” said Tal Cohen, President at Nasdaq. “We’re proud to partner with the CFTC and support their mission to promote the integrity, resilience, and vibrancy of U.S. derivatives markets.”

The CFTC’s oversight remit spans a broad and increasingly complex set of markets, including fixed income, commodities, currencies, crypto assets, and event-based derivatives. With continuous trading hours and innovations in market structure accelerating risks, the new platform equips the agency with real-time analytics, comprehensive order book data, and the ability to detect potential manipulation across asset classes.

The agency has also been positioning itself to take on greater responsibilities in digital asset markets, recently launching a “crypto sprint” to implement recommendations from a White House report. The addition of Nasdaq’s surveillance system strengthens the CFTC’s capacity to meet these challenges, underscoring its role as a leading derivatives regulator adapting to 21st-century market dynamics.

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