Welcome to the October edition of The Monitor. It’s event season, so between conference conversations and regulatory updates, firms are focused on keeping their surveillance and best execution programs sharp and ready for whatever surprises the markets bring next.
Across the events we’ve attended this fall, from STA Dallas to the FINRA Small Firm Conference to the STA Annual Market Conference this week; several themes have stood out.
Trading and compliance leaders are focused on setting up surveillance programs efficiently so they can stay effective as markets evolve. Many are exploring how to apply AI responsibly, manage oversight across 24/5 and event contract markets, and prepare for Rule 605 updates. Even with the recent Rule 605 delay, forward-thinking firms are working closely with their vendors to strengthen data quality, streamline reporting, and refine the analytics that will support compliance in the year ahead.
I hope you find this issue timely and useful as you navigate what’s next for trade compliance and best execution analytics.
– Lisa Balter Saacks, President at Trillium Surveyor
Trading Compliance Newsbeat
False Positives & Surveillance Efficiency
Last month we asked about false positive tagging. Real efficiency in surveillance comes from practical tools that cut through noise and make oversight more effective. False positive tagging helps teams focus reviews, reduce repetitive alerts, and maintain regulator-friendly workflows.
Here’s how tagging works in Surveyor and how any firm can apply the same principles to strengthen day-to-day monitoring.
How False Positive Tagging works on Surveyor Trade Surveillance
- Users tag alerts as false positives when an alert does not represent true market abuse.
- These tags help refine the system as each tagged alert feeds back into the platform’s logic to reduce repetition of similar false positives over time.
- This improved logic strengthens oversight. Teams see fewer irrelevant alerts which allows them to focus on the most concerning patterns of activity.
If you’d like to see how our team approaches this in practice, we’re happy to walk through it with you.
Regulatory Slowdown: SEC Staff Furloughs
The federal government shutdown entered on October 1, 2025 has led to severe staff furloughs at the SEC, with over 90% of its workforce placed on leave. As a result, routine enforcement actions, interpretive guidance and market oversight functions are largely paused.
While the shutdown doesn’t directly affect firms’ day-to-day surveillance and best execution analytics, it can delay responses to inquiries and create temporary uncertainty around regulatory expectations. Compliance leaders should communicate proactively with internal teams and external partners about potential timing impacts on reporting, examinations, or pending guidance.
FINRA Small Firm Conference: Key Takeaways
This year’s FINRA Small Firm Conference highlighted several themes that reflect the broader direction of regulatory focus. Many discussions centered on how smaller firms can maintain strong supervision and surveillance programs while balancing resource constraints. Below are a few highlights and practical considerations from the sessions.
- Tailor your surveillance setup. FINRA emphasized tuning systems to your firm’s activity to avoid excessive exceptions and keep alerts meaningful.
- Use AI responsibly. Regulators encourage adoption but stressed the need to keep a “human in the loop” for judgment and accountability.
- Stay ahead of evolving financial crime. Fraud and manipulation schemes continue to target smaller institutions with limited resources, making rule calibration and scalable technology essential for effective detection.
- Ensure supervision covers hybrid teams. Oversight should capture activity across both in-office and remote environments.
- Modernize through technology. Automation and analytics are now core expectations in compliance, helping firms improve efficiency, reporting accuracy, and documentation quality.
- Expand communications oversight. Texting, chat, and social platforms remain top areas of focus for examiners.
Regulatory Radar
- Rule 605 Delay
The SEC extended the compliance date for amended Rule 605 reporting to August 1, 2026. Forward-thinking firms are using this additional time to prepare data pipelines, test new metrics, and coordinate with vendors on system readiness.
- CFTC No-Action Relief on Event-Based Contracts
The CFTC issued no-action relief allowing certain event-based and prediction-market contracts to continue trading under specific conditions. Firms are reviewing surveillance coverage for trading tied to event outcomes and short-duration markets.
- SEC-CFTC Coordination on Digital Assets
The agencies’ joint roundtable in late September focused on aligning oversight for digital and traditional markets, signaling progress toward unified standards for platforms, product definitions, and participants.
- Treasury Clearing Rule, Extended Deadlines
The SEC extended compliance deadlines for its Treasury clearing mandate, acknowledging data-integration challenges while urging firms to continue building workflows that consolidate clearing activity into surveillance and reporting.
- Reg NMS Rule 611 Trade-Through Review
The SEC is reevaluating the trade-through rule that guides order routing and execution benchmarking. Updates could reshape how firms assess execution quality and venue performance.
Poll: Event Contracts Participation
How is your firm approaching surveillance for prediction markets and event contracts (Kalshi, election markets, etc.)?
Response choices:
- Using existing framework
- Planning, need better tools
- Manual review as needed
- Waiting for regulatory clarity
Why It Matters
As the CFTC provides new guidance on event contracts, firms are reassessing surveillance for these markets. Your input will help shape future insights as we explore how compliance teams are adapting.
Products and Services
Feature Spotlight: Strengthening Best Execution Oversight
This month we’re highlighting two filters teams are leveraging with Surveyor Best Ex to strengthen their best execution oversight. Both help identify execution quality issues early and ensure firms can review performance with confidence.
Trade-Through Filter
Flags orders executed outside the National Best Bid and Offer (NBBO).
How it helps: Enables teams to quickly identify potential trade-throughs and assess routing performance against execution quality standards.
Missed Fill Report
Scans for limit or stop orders that were due to fill on the previous day but did not.
How it helps: Highlights potential misfills or routing delays so teams can review execution accuracy and address gaps before reporting cycles.
The reports automatically flag trade-throughs and identify unfilled orders to ensure best execution compliance and uncover systematic routing issues before they become problems.
Our Social Calendar
Conference season is in full swing, and it’s been great connecting with so many of you in person. From STA Dallas to the FINRA Small Firm Conference and STA Annual this week, the energy around innovation and collaboration in compliance has been stronger than ever.
We’re looking forward to seeing many of you at the upcoming events:
- STA Annual Market Structure Conference
- NSCP National Conference
- FIA Expo
We also took a moment to celebrate National Compliance Officer Day, recognizing the professionals who keep our markets fair, transparent, and well-run.
Thank you to the compliance community for nominating Daniel Nieves at TradeStation, recognized for his meticulous approach, data-driven insights, and commitment to mentoring colleagues. Congratulations, Dan, and thank you to all the compliance professionals who keep our industry moving forward.
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Our Director of Product, Melissa Watras, recently joined The Intuition Finance Digest podcast to share insights on her career path, her perspective on AI in compliance, and the key skills shaping the next generation of financial professionals.
Let’s Connect
Curious how Surveyor can help your firm overcome your unique challenges and meet your goals? Contact us here and we’ll set up some time to discuss. Contact us here and we’ll set up some time to discuss.