Surveillance system finds traction among small brokers

BSE's online surveillance system- e-BOSS - is proving to an important weapon in the armoury for smaller and medium-sized brokerages, which have failed to keep pace with their larger peers.

Introduced over a year ago and available for free, this system has hugely reduced the risks of trading at their terminals as the system generates alerts both online and offline trades.

'Online' alerts refer to real-time alerts being generated in the system while offline refers to alerts at the end of the trading session.

"For smaller brokerages it may not be viable to have sophisticated systems that can track trades on real-time basis. That is where the e-BOSS system has been able to help traders," said Uttam Bagri, managing director at BCB Finance.

e-BOSS online surveillance system is helps track of unusual trades in both the equity and derivatives segment. The system generates alerts when there is a substantial increase in client trading activity or if there is a sudden trading activity in a dormant account besides keeping in check market manipulative practices.

The system has standardised the surveillance system across the industry, brokerage officials said.

"We already had in place an offline surveillance mechanism system as part of our risk-management system. But the availability of the real-time alerts is what makes surveillance much more robust and efficient," said Santanu Syam, executive director - operations, Angel Broking.

The BSE, on a real-time basis provides alerts to brokerages which are then flagged off to the concerned departments. A similar system is available on the NSE which provides trade alerts.

However, some in the industry believe that the system could also trigger false alerts.

"The one issue with the system is that it is unable to identify whether the trade conducted is right or wrong. That verification can happen only once an enquiry is done into such trades," said Syam of Angel Broking.

As per industry estimates, for a large-sized brokerage, on an average about 200-300 alerts are generated daily.

"If a trade size exceeds one lakh shares, then the system immediately picks it up and broadcasts it as an alert. Which means that for some large brokerages, there could be too many alerts generated," said the head of a brokerage who did not wish to be named.