Japan Exchange Regulation and Tokyo Stock Exchange Implementing AI Solutions

Mar 28, 2018

Using artificial intelligence is gaining popularity in developed economies as a tool to prevent market abuse. Last week, global market players - Japan Exchange Regulation (JPX-R) and Tokyo Stock Exchange, Inc. (TSE), went public about adding AI Solutions to market supervision tools.

In this case, usage of AI implies creating and developing surveillance systems for the trading process. All orders are to be checked by the system if they raise any suspicions on unfair trading. Afterwards, surveillance workers will investigate every case of misconduct and choose whether there is a need in further investigation. NEC Corporation and Hitachi Ltd will supply AI technologies for the Japanese market as they were previously used for the trade activity surveillance. The data was used to detect suspicious trading activity and initiate investigations for doubtful cases. New features will allow personnel of JPX-R and TSE dedicate more time on detailed analysis of any suspicious cases. Artificial intelligence will take the responsibility to identify and conduct primary analysis on trade operations.

It has already been a year since JPX-R and TSE started testing AI services to secure trading platforms. They already have a base of fraud patterns, know possible ways of unfair trading and taught AI how to reveal/analyse them. After the new AI technologies are implemented in full, surveillance personnel will improve monitoring function and access to final decision of the program. Hitachi AI Technology is already one of the best in analysing large amounts of data and people will have to perform only deep research of suspicious trades, come to final solutions on punishments and preventive measures.

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