Is Eventus Validus platform the silver bullet for simplifying global trade surveillance?

Established in 2015, Eventus Systems is a provider of multi-asset class trade surveillance and market risk solutions for customer bases such as broker-dealers, banks and crypto exchanges through its trademark Validus platform. How can Validus help simplify global trade surveillance?

The idea for Eventus was born almost a decade ago. Back in 2014, Travis Schwab the current CEO was serving as CEO of RGM Securities. According to Eventus global head of regulatory affairs Joe Schifano, while RGM was trading extensively and its volume was akin to that of a Tier 1 bank, Schwab was unable to find a vendor that could provide what his company needed from a trade surveillance and market risk standpoint based on this activity level.

Schifano continued, ?He looked at products in the space, and none offered a real-time capability or ability to scale. Recognising the gap in the market, Travis founded Eventus to serve the broader marketplace, starting in equities and expanding across asset classes, with the ability to handle large volumes of data. From here, Eventus set out to be the market most responsive and knowledgeable provider of trade surveillance and market risk solutions?.

The rise of Validus

The resulting product was Validus, Eventus trademark platform that applies machine learning and robotic process automation so users can detect relevant market behaviour and avoid time-wasting chases. The platform features hundreds of pre-built trade surveillance and risk monitoring procedures that clients can tailor to their own facts and circumstances, as well as provides anti-money laundering, transaction monitoring and algo monitoring capabilities.

Schifano added, ?Validus can be deployed rapidly, and it operates in real-time or T+1 environments or a combination of the two. It can also be deployed in the cloud or onpremises. The Validus platform is primarily based on C++ and Python, and our technology approach is Agile. Validus can ingest data from disparate sources via our ETL process, presenting clients with all their normalized data vs only what relates to their alerts.

?Full-featured APIs and scalable architecture provide maximum flexibility and interoperability. Centralised, intuitive dashboards designed to integrate regulatory, operational and financial processes make in-depth reporting and reconciliation seamless. Our real-time data management include generating real-time alerts within five seconds of an event and enabling clients to take immediate remedial action.

?Validus normalises and interweaves masses of data, including tens of billions of messages per day in market data, trade lifecycle data and reference data. All of this is then compiled into easy-to-understand, actionable alerts for immediate action when needed. The platform is fully customizable and can be modified in detail. Procedures and reports can be tailored to specific client needs.

What sets Eventus apart from competitors? According to Schifano, a key differentiator is it can offer more than anyone else. He remarked, ?No other trade surveillance platform gives clients the level of flexibility and customisation, integration and automation tools, or the ability to cast such a wide net and escalate only the most actionable alerts.

?Eventus routinely engages directly with global regulators on behalf of clients seeking registration and to demonstrate surveillance capabilities. Our hands-on client service from highly experienced market practitioners many of whom have been directly in the clients roles is unmatched in the industry. The focus on collaborating with clients with team members who thoroughly understand the challenges they face is one of the qualities clients cite regularly as to why they chose Eventus over competitors or moved from another provider?.

Validus is also becoming a key go-to in the digital asset trade surveillance market and represents a wide cross-section of crypto exchanges worldwide. According to Schifano, the platform meets the extremely high security requirements of the exchanges and provides the ability to surveil, 24/7, billions of messages in real-time something most surveillance systems are not designed to withstand. Schifano believes there are five critical reasons clients choose Eventus over building their own solutions. ?The first is that clients get a product that is constantly evolving to meet the requirements of a rapidly changing regulatory landscape. Second, Validus undergoes enhancements based on feedback from our diverse client roster, including multiple asset classes and client types, allowing Eventus to bring the wisdom from the masses to our entire customer base.

?Third, it is my experience that compliance teams want tools that evolve with the times, yet in-house systems almost always start depreciating the moment they go live. Fourth, as trading systems improve, it is critical that surveillance systems employ the latest technologies as well, particularly as it relates to the ability to ingest disparate sources of data accurately, efficiently, and quickly. Lastly, it is no secret that it is increasingly difficult to attract and keep good technical staff. This need is greatly magnified when firms support their own platforms, particularly when staff is ready to move on to new and exciting projects after building an in-house system.

?We provide clients with a much more cost-effective solution than building a trade surveillance solution from scratch or relying on a legacy provider. Our team has built a robust, scalable platform that we continuously update to provide new enhancements and functionality that incorporates new regulations and exchange rules in jurisdictions across the globe?.

Pain points

In a world that is becoming ever more digital and globalised by the day, many companies are needing to find a way to address evolving regulations and exchange rules in multiple jurisdictions around the world and make sure they are compliant.

According to Schifano, this is where Validus steps in. The platform, he claims, is designed to maximise the efficiency of a company regulatory operations not only through automation and customisation but also by combining surveillance, risk, AML and transaction monitoring onto the same platform. This helps clients minimise the time needed to resolve issues and avoid regulatory fines and reputational damage.

He continued, ?Missing any type of market abuse can seriously jeopardize a firm reputation, subject it to regulatory repercussions and now even expose an executive to personal liability. In the U.S., the Dodd-Frank Act of 2010 now makes individuals personally liable, and other jurisdictions across the globe have escalated their enforcement in that direction. While these activities were never allowed before, the trend has shifted the onus and provided for significantly more penalties?.

Among the pain points Eventus is looking to address through Validus is help compliance staff identify and address fraud and market-manipulating behaviour, enable clients to receive truly actionable alerts, and bring greater efficiencies to ensure compliance teams follow up on the most relevant information. The platform gives risk managers real-time risk monitoring capabilities and offers AML and transaction monitoring capabilities to digital asset markets and others.

Schifano went on, ?Compliance teams are increasingly under immense pressure to do more with less. It critical to have a solution that addresses the unique needs of a firm while automating as much as possible. Eventus helped one client automate review of their cross-trade alerts, tagging 99.6% of them with explanations through automation, and escalating the balance for human review. This enabled the staff to focus its attention on those areas requiring human intervention, while maintaining an audit trail of the rest for trend analysis. We note that automation does not solve all challenges either, but firms need to explain their behaviours to regulators. Validus meets this objective for our clients?.

Funding and future plans

Following a successful Series A last year, the company quadrupled its staff. Earlier this year, Eventus built on this by raising $30M from its Series B, which it will use to further scale the business, particularly in its global sales, product and engineering teams.

Schifano remarked Eventus was undertaking aggressive hiring globally, with the aim of doubling its staff again following the Series B. He added, ?The funding is enabling us to build further on the Validus platform and expand our product suite across more asset classes. We are introducing new financial risk applications to the platform and finding new ways to leverage the massive data sets we absorb daily?. He noted Eventus has rapidly expanded its presence and client base outside of the US in EMEA, Canada and Asia Pacific, with hires already on the ground in each of these regions. ?We are looking forward to bringing our high-touch and responsive client support model to each region with existing and future staff?.

Eventus recently announced a strategic partnership with TRM Labs and Notabene called Project TEN. Schifano explained, ?With the launch of Project TEN, crypto-native firms and traditional financial institutions moving into virtual assets will benefit from our joint service that will feature Eventus trade surveillance and market risk applications; TRM Labs transaction monitoring, wallet screening and forensics tools; and Notabene counterparty risk management and Travel Rule compliance software. Our clients value the robust trade surveillance and transaction monitoring we currently provide, and we also recognize that clients in the digital asset market increasingly want to aggregate data from their Best-in-Breed KYC/AML tools in a more holistic view of compliance risk?.

Eventus also expanded its capability relative to monitoring algorithmic trading activity. Schifano explained that Validus Algo Monitoring solution provides real-time insight into the state and behaviour of a client algorithmic trading and client Direct Market Access flows to manage and reduce risk, monitor and analyse flows and ensure compliance with relevant regulations. He further remarked, ?We plan to expand our machine learning initiatives to provide risk profiles off of a trader unique trade history, giving firms valuable new insights into trading behaviour?.

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