Stock market regulator to use Irish software

Irish technology group First Derivatives is to provide software and management services to Australia’s stock market watchdog from next June.

The company confirmed yesterday that the Australian Securities and Investment Commission has awarded it the contract to provide the software for its market surveillance system.

The deal is the first the Newry-based trading and markets software specialist has done with a market regulator, although it provides systems for a number of markets, including Singapore’s stock exchange.

The company would not say yesterday how much the four-year contract will be worth to the business. However, the Australian authorities announced this year that they had a $16 million Australian dollar (€12.8 million) budget for capital spending on their regulatory systems. First Derivatives chief executive Brian Conlan said the company would get a “significant slice” of that figure.

He said the real breakthrough for the company was the fact that it had been chosen by a market regulator. The Irish competition had seen off competition from incumbent Nasdaq-owned Smarts to win the contract.

Its systems will be used to detect potential market abuses such as insider trading and price manipulation. It will also provide an early warning system to prevent flash crashes – sharp plunges in market indices caused by automated trading programmes – such as the one that knocked 10 per cent off the Dow Jones average in May 2010.