A Basic Introduction To Trade Monitoring Systems

Posted on June 22, 2017

The liberalization of stock markets over the last few years has seen the entry of many global investors in many markets. The integration of financial markets can now allow traders in one country to buy stocks in a different market. However, with these globalization a number of challenges have arisen. One of the key issues is money laundering. There have been reported cases where stock markets have been used to launder money. In order to prevent this, regulators in various countries have created a set of rules and regulations that brokers and other traders in financial markets should abide by. The rules are designed to reduce exposure to financial crime in stock market trading while enhancing transparency and integrity in the entire sector. Financial firms are putting in place a wide range of creative solutions to meet these rules but the use of trade monitors over the last few years has been very successful.

Trade Monitors Definition

A trade monitor is a system or software that is designed to provide automatic surveillance and monitoring of trades in the stock market. The software is developed normally by third party companies and sold as an enterprise solution to financial service companies. The trade monitors are integrated within the financial organization and they will monitor trading across various assets to ensure there are no violations of set rules. Even though there are cases where a flagged transaction may still be good, quality trade monitors will have very few such cases.

Why Invest In Trade Monitors

Investing in trade monitors as a brokerage firm has great benefits.  Here is a full break down of what you should expect:

Better Performance and Efficiency

The trade monitors are better placed to offer effective transaction monitoring without really affecting the efficiency and performance of your company. The systems are designed to work in the background and will track trading in the real time. But you won’t even notice anything until of course something is flagged. This is a very huge plus especially in the stock market where split second decisions can make all the difference.


Tracking trades in the stock market is not as easy without quality software. Even though trade monitors offer an automatic and simple option to monitor trades, without them things would be so complicated. All you need as a broker is to invest in such systems and sit back and wait for them to deliver for you.

Low Costs

Compliance monitoring can often cost a lot of money but it doesn’t have to. The initial investment you’ll need to put in place trade monitors is high but after that, the overall costs will be quite low.

The use of trade monitors is an essential strategy for stock brokers keen on adhering to all regulations in the market.

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