A Surveillance-Sharing Agreement (SSA) is a formal pact between a regulated exchange and a market where an underlying asset trades, designed to provide regulators with access to trading data to detect and prevent market manipulation. This mechanism enhances oversight and investor protection by increasing transparency across interconnected markets.
Mechanism
The operational logic of an SSA involves the regulated exchange, seeking to list a financial product (e.g., a crypto ETP), entering into an agreement with a significant spot market for the underlying crypto asset. This agreement grants the exchange’s regulator access to comprehensive trading data from the spot market, enabling real-time monitoring for manipulative practices and ensuring market integrity.
Methodology
The strategic approach behind SSAs aims to mitigate risks associated with market manipulation, particularly in nascent or less regulated markets like crypto, by extending the reach of regulatory oversight. This methodology is critical for institutional crypto investing and the approval of regulated crypto products, as it provides a framework for ensuring fair and orderly markets, reducing concerns about market integrity for RFQ crypto and institutional options trading activities.
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