The NASD Regulation Advanced-Detection System (ADS)

J. Dale Kirkland, Ted E. Senator, James J. Hayden, Tomasz Dybala, Henry G. Goldberg, Ping Shyr

Abstract


The National Association of Securities Dealers, Inc., regulation advanced-detection system (ADS) monitors trades and quotations in The Nasdaq Stock Market to identify patterns and practices of behavior of potential regulatory interest. ADS has been in operational use at NASD Regulation since the summer of 1997 by several groups of analysts, processing approximately 2 million transactions a day, generating over 10,000 breaks. More important, it has greatly expanded surveillance coverage to new areas of the market and to many new types of behavior of regulatory concern. ADS combines detection and discovery components in a single system that supports multiple regulatory domains and shares the same market data. ADS makes use of a variety of AI techniques, including visualization, pattern recognition, and data mining, in support of the activities of regulatory analysis, alert and pattern detection, and knowledge discovery.

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DOI: http://dx.doi.org/10.1609/aimag.v20i1.1440

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