CFTC is replacing its old 1990s surveillance system with Nasdaq’s advanced technology

The U.S. Commodity Futures Trading Commission (CFTC) is making a big move toward modernizing its market surveillance. The regulator has joined forces with Nasdaq to implement the latter’s Market Surveillance solution, which several exchanges and regulators across the globe already use.

For the CFTC, the shift is also a turning point. Its current surveillance system dates back to the 1990s and was intended for a far different trading stage. Today’s markets are faster, more global, and vastly more complex, with crypto assets and prediction markets in the mix. Regulators say the old tools are no match for new challenges.

Using Nasdaq’s technology, the CFTC hopes to plug holes in fraud detection and monitor the market. The platform offers auto-alerts, cross-market analytics, and real-time visibility into trading activity. This will allow investigators to identify suspicious activity sooner, to take action more quickly, and to better protect U.S. markets and investors from manipulation and abuse.

The decision also comes as political and industry pressure increases on regulators to bolster oversight of digital assets. Crypto markets never close, and the price swings and trading volumes can shoot up within minutes. Watchdogs risk being left behind without advanced technology.

Officials say the upgrade makes the CFTC a more effective enforcer of market integrity when American financial oversight has been under a microscope. It is about replacing a pretty old system as much as creating a regulator ready for the future of finance.

CFTC acts to speed up spot market abuse enforcement

CFTC and Nasdaq want real-time trade surveillance across all asset classes, including crypto. The CFTC is working with Nasdaq on allowing market surveillance information sharing from CME Group, sending direct market participants information that in the past was kept confidential for obvious reasons.

Acting Chair Caroline D. Pham said the rise of digital finance continued to influence the work of the CFTC and noted that the upgrade was vital as the agency assumed a greater role in overseeing the sector. 

She stressed that as markets evolved, the regulator also had to evolve. According to her, Nasdaq Market Surveillance would provide automated alerts and cross-market analytics, enabling the CFTC to track unusual trades, prevent manipulation, and protect investors more quickly.

The system, which replaces decades-old technology at the agency, allows staff to simultaneously scan trading patterns across traditional derivatives and fast-moving crypto markets. Officials say this is crucial to forestalling risks such as wash trading, price manipulation, or cross-exchange arbitrage in digital assets.

The rollout is part of a larger push at the agency for modernization to place the CFTC as a “21st century regulator.”

Nasdaq extends reach in market oversight push

Nasdaq is not new to market regulation. Its monitoring technology already supports over 50 exchanges and 20 regulators globally, including Europe and Asia.

In working with the CFTC, Nasdaq broadened the way in which it helps police the financial web in the United States. Its technology can monitor manipulation across asset classes, commodities, fixed income, cryptocurrencies, and prediction markets.

The technology provides granular order-book data and the ability to scale during periods of high volatility. This is particularly important for crypto markets that are open 24/7 and can move extremely fast.

Tal Cohen, the president of Nasdaq, said that today’s markets require technology capable of responding quickly. He added that Nasdaq was proud to support the CFTC in its efforts to ensure the resilience and fairness of U.S. markets.

The agency isn’t only focusing on the old markets of the past. It is also preparing for the next wave of financial creativity. Earlier this year, it introduced a “crypto sprint” to examine digital assets and follow recommendations from a White House report.

The rise of round-the-clock trading, decentralized finance, and prediction markets calls for more sophisticated surveillance tools. The CFTC can gain a straightforward view across markets through Nasdaq’s platform. So fraud or unusual activity in one asset class can be cross-checked with others.

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