Market Surveillance


DEFINITION of 'Market Surveillance'

The prevention and investigation of abusive, manipulative or illegal trading practices in the securities markets. Market surveillance helps to ensure orderly markets, where buyers and sellers are willing to participate because they feel confident in the fairness and accuracy of transactions. Without market surveillance, a market could become disorderly, which would discourage investment and inhibit economic growth. Market surveillance can be provided by the private sector and/or the public sector.

BREAKING DOWN 'Market Surveillance'

For example, NASDAQ OMX, a private-sector company, offers a market surveillance product called SMARTS that assists individual exchanges as well as regulatory agencies and brokers in monitoring trading activities across multiple markets and asset classes.

At the government level, entities such as the SEC's Division of Enforcement provide broad market surveillance to help uphold securities laws and protect investors against fraud. More focused government organizations, such as the Commodity Futures Trading Commission (CFTC), provide market surveillance for specific segments of the market (for example, the futures market). Private, self-regulatory organizations such as the National Futures Association (NFA) also conduct market surveillance.

  1. Nasdaq

    A global electronic marketplace for buying and selling securities, ...
  2. Intermarket Surveillance Group ...

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  3. Boiler Room

    A place where high-pressure salespeople use banks of telephones ...
  4. Front Running

    The unethical practice of a broker trading an equity based on ...
  5. Churning

    Excessive trading by a broker in a client's account largely to ...
  6. Insider Trading

    The buying or selling of a security by someone who has access ...
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