Emile Werr and Stephen Cohen on Big Data And Market Regulation

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Emile Werr, New York Stock Exchange Big Data Group Head of Surveillance and Stephen Cohen, Securities and Exchange Commission Division of Enforcement Associate Director, appeared on CNBC's Squawk Box on Thursday morning to talk about big data's role and future in market regulation. Werr says that they're starting to analyze data at a much faster pace. "Big Data in general is all about, kind of what we call the four Vs. For us it's basically volume. Massive volumes. You mentioned about billions of transactions per day. We processed yesterday, or on Tuesday actually, 21.8 billion transactions, just U.S. markets alone. We talk about the variety of the data, there's all different flavors of data, it comes in different forms and different structures, and that's very complex to analyze, said Werr. "You talk about the velocity, we're all about high frequency trading now, so the ability to basically process that data quickly, to keep up with the market, and be able to monitor it is really important. And lastly, the volatility is very important in terms of being able to be elastic, be able to manage the kind of market, you know, fluctuations that you see." He said that big data is really about the four Vs he mentioned, all of which encompass the massive volume and shear complexity in doing analytics at this level. In the world of data architecture, they call it federated data architecture, which takes many different severs and has them work together to break problems down into many pieces, and then reconstructs them in order to find solutions. "I think over the last few years we've really seen a golden age for the Securities and Exchange Commission's use of data," said Cohen. "We're now able to harness this data and use it in all kinds of investigations, from insider trading and market structure investigations, financial fraud, asset management, so all across, we're using this data." Cohen said that they're a small agency with a big mandate, and that they're success comes from being smart and targeted. According to Werr, it's hard to hide in all of the available data. "It used to be easy to hide in the weeds, now it's not so easy," said Werr. Werr said that before big data solutions, there was no way to bring information together. He went on to say that a lot of information would get lost before having the ability to properly integrate it. Cohen said that the industry is developing a system that will allow them to track trades across all markets, where they can see the entire lifecycle of a trade, providing an enormous amount of information for regulators to oversee the markets.
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Posted In: CNBCNewsTopicsHotTechMediaGeneralCNBCCNBC Squawk BoxEmile WerrNew York Stock ExchangeNYSENYSE Big Data GroupSECSecurities and Exchange CommissionStephen Cohen
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