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 NASD SELECTS SUN SPARC WORKSTATIONS FOR NASDAQ STOCK MARKET SURVEILLANCE

SunFLASH Vol 18 #16					 	June 1990 
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Easy-to-Use UNIX Workstations Help Investigate Insider Trading
 
 
MOUNTAIN VIEW, Calif.--June 12, 1990-- The National Association of
Securities Dealers Inc. (NASD) has selected UNIX(R)-based
SPARCstation(TM) 1 workstations from Sun Microsystems to assist in
realtime monitoring of trading activity in the NASDAQ stock market and
to investigate suspicious trading practices.

The 29 SPARCstations, complementing the 17 Sun386i(TM) workstations
already in use at the NASDAQ Stock Market Surveillance department in
Rockville, Md., instantaneously display unusual price and volume
behavior.  This enables analysts to halt trading quickly -- if
necessary -- to provide for adequate dissemination of news.

The workstations also assist in investigations of suspicious trading
activity by allowing analysts to gather and analyze diverse information
on one screen.

"We chose the Sun workstations for their outstanding performance
capabilities and because they connected easily with our minicomputer,"
said John DeSaix, director of compliance systems development within
NASD's automation division.  "The workstations' multi-tasking and
windowing capabilities enable our analysts to work with a tremendous
diversity of data -- including spreadsheets, databases, realtime market
data and word processing programs -- on one screen simultaneously."


SWATing Insider Trades

NASD's StockWatch Automated Tracking (SWAT) system is built around
Tandem computers running custom-built software.  This software monitors
every trade or price change on NASDAQ as well as information broadcast
over four financial newswires.

"If there is a low probability of a trade or price change occurring --
based on such factors as trading history or news that will be announced
-- the event is flagged and sent to our analysts in realtime," said
Jack Samarias, vice president of administrative and regulatory
information systems at NASD.

NASD analysts, notified of questionable activity on their workstation
screens, evaluate each suspect movement and, if necessary, instantly
halt trading on affected stocks.  The halted trading gives all
investors the opportunity to learn of information that previously may
have been available to only a few professional investors.

If illegal trading or price manipulation are suspected, a second set of
analysts is alerted.  Using the workstations, they gather and analyze
data to determine if NASD or SEC rules have been violated.

For instance, analysts use the workstations to examine "blue sheet"
information provided by brokerage firms on stocks with suspicious
activity to determine where investors are employed and reside, among
other things.  This information can then be analyzed on the
workstations to determine, for example, if an investor lives next door
to an individual who has access to confidential information.

In this function, each Sun workstation replaces several terminals
previously required to access the news, pricing and historical data
necessary to analyze questionable market activity.

In addition to monitoring and analyzing information from sources
simultaneously, the workstations allow analysts to take notes easily
and produce final reports.

Making SWAT Better

To refine the SWAT system, analysts periodically review trading-related
incidents that the SWAT software has flagged and indicate which of
these incidents were significant.  This information is fed into a
statistical program on the workstations in order to more precisely
calibrate the SWAT statistical model.

Sun Microsystems, Inc., headquartered in Mountain View, Calif., is a
leading worldwide supplier of network-based distributed computing
systems, including professional workstations, servers and UNIX
operating system and productivity software.

###

SPARCstation and Sun386i are trademarks of Sun Microsystems, Inc.  UNIX
is a registered trademark of AT&T.  All other products or services
mentioned in this document are identified by the trademarks or service
marks of their respective companies or organizations.

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