ACA has introduced backtesting and scenario analysis, a new capability within our Market Abuse Surveillance (MAS) solution. This feature enables compliance teams to recalibrate and test algorithm parameters using historical data, generate simulations for parameter changes, and compare outcomes side by side. It helps firms validate surveillance assumptions and maintain uninterrupted audit history while meeting regulatory expectations more effectively.
As regulatory guidance evolves, and surveillance models grow more complex, compliance teams need smarter tools to stay ahead. Backtesting and scenario analysis streamlines model validation and supports stronger compliance outcomes.
Key Capabilities
Backtesting and scenario analysis within MAS enables compliance teams to:
- Calibrate and test algorithm parameters using a built-in workflow.
- Rapidly generate “what-if” scenarios for parameter changes and compare results.
- Design custom filters to tailor alerts to your firm’s needs.
- Maintain seamless audit history and integrated reporting to demonstrate compliance efficiently.
- Align with FCA Market Watch 79 guidance on surveillance model testing.
Who Benefits
Compliance leaders, surveillance analysts, and operations teams can:
- Validate algorithm assumptions without disrupting production.
- Improve detection accuracy and reduce false positives.
- Demonstrate regulatory compliance with confidence.
Why It Matters
Once algorithms are live, validating initial surveillance assumptions can be challenging. This solution enables side-by-side comparisons of results based on parameter changes, helping firms identify missed trades and optimize detection accuracy. Once validated, scenarios can be published seamlessly and retire old algorithms while preserving audit history.
Learn More
Discover how backtesting and scenario analysis can make your surveillance oversight smarter and more effective.
Contact us to learn how to strengthen your firm’s compliance program today.