The firm produces R3cognition (pronounced ‘recognition’) Web, a web-based programme which it describes as a “speed camera for derivatives traders”.
Its main clients are member firms of exchanges, from market makers to investment banks, which use the software to identify breaches of regulation and track patterns of improper behaviour.
The brand has changed but still refers to what R3cognition calls the three R’s – risk, regulation and reputation.
The system, which works on a T+1 basis, automatically sends out an alert when a trader breaks regulations. It uses exception-based monitoring, which means the only trades flagged are those which breach exchange rules.
A summary of the rule that has been breached is sent along with the alert, so that a compliance officer can explain to a trader what has happened. The alerts come in the form of daily T+1 compliance reports, so that users can have all the information they need in one document.
Compliance officers can view the alerts on a trader by trader basis, so that they can spot systematic offenders.