Time-lock encryption is a method to encrypt data such that it can only be decrypted after a certain deadline has passed. The goal is to protect data from being decrypted prematurely. There are various ways to build time-lock encryption for different protection requirements. The architecture needs precise calibration of time with an independent time aware atomic clock, such as the NIST. Besides, we don’t want to push the bottleneck to an arms-race of using high-performing computers to decrypt data. Hence, computational resources and the type of data contents must also be considered in the design of a reliable encryption scheme.

Our patented solution reduces data storage and booster the efficiency in data distribution, while also enabling the replicate the depth-of-book information (relative strengths in bid/ask price and steepness of the price curve). We acknowledge that the buy-side also wants the SIP to include all the odd-lot details amid some hidden cost for high priced stocks. My response is: When we are in the midst of systemic reform, asking for too much or insisting on “complete” transparency, may indeed be detrimental to price discovery and the sustainable development of a healthy market. We do want to strike the appropriate balance in order to avoid a “No fish can survive when the water is too clear” situation. Given that, we’ll preserve the richness of contents to the best we can, while making the tool fast, easy, secure and fit for the effective monitoring of trade activities.

At Data Boiler, we would love the opportunity to partner with OMS/EMS vendors in helping manage the data submission part of CAT project. More so, we are interested in solving the analytical challenges for CAT and supporting the SROs in combating fraud. One of the key takeaways from the SEC roundtable on Regulatory Approaches to Combating Fraud is that “acting quickly is very important”. This includes: preventing more people becoming victims of fraud scams and recouping losses, as well as how to improve the FINRA trade halt authority so that it can act more quickly. For that, we propose the following values-added features associated with the CAT data collection process: • Let Data Boiler “boils the ocean” to handle the preliminary trade analytics for and on-behalf of the SEC, FINRA and the SROs, so as to enable a real-time detection and early warning of trade irregularities for prompt actions; • Provide the filer with a percentage indicator that the broker/ dealer’ trade activities may be subjected to the SEC/ FINRA/ SROs exams (giving the data submitters a comfort level if their transactions are “clean” or need to be further reviewed); • Provide a report of all identified trade irregularities to the filer, so firms can incorporate it into their Suspicious Activity Report (addressing concerns that investigators often found SARs missed reporting many issues); • Also, review any consistency matters, monitor changes in risk profile and other indicators to assess if firms are acting in clients’ Best Interest (rather than in conflict or disregard of fiduciary principle); • Work with the SEC, FINRA, and SROs by licensing our patented inventions to help build the industry’s next generation systems that consist of: trade reconstruction, order book replay simulator, advanced pattern recognition techniques, RENTD calculator, crowd computing, and more.

MP3 is indeed a lossy compression type, while human ears couldn’t distinguish almost any difference from lossless music. Lossy methods yield a substantially greater compression ratio (60% or more of the original stream) as compared to traditional techniques (only 5-20%) that exploit statistical redundancy, Huffman coding, or probability method to represent and compress market data.

The Consolidated Audit Trail (CAT) NMS plan – Rule 613(f) mandated that “Every national securities exchange and national securities association subject to this section shall develop and implement a surveillance system, or enhance existing surveillance systems, reasonably designed to make use of the consolidated information contained in CAT.”

Since a thousand trades can occur in between the 50 +/- millisecond tolerance time allowed by CAT, the inexactitude in trade sequencing would cause analytic results based on vector measurements/ visualized heat-maps to be erroneous. To overcome this inherent problem of data imprecision, our suite of patented inventions applies a “music plagiarism detection” method to achieve higher tolerance to the unsynchronized clock issue, and is capable of recognizing patterns more quickly (up to 50 milliseconds top speed, as compared to taking hours or days or even months for trade review). Aside from the accelerated speed to decipher what’s going on in the market, it has fewer false-positives/ false-negatives than the traditional techniques. It makes implementation of preventive controls in real- time possible; and there are other benefits such as the ease of trade reconstruction, order book replay simulation, backstop assurance, case management capabilities, crowd computing methods, and more. We are the ONLY solution to address IOSCO - CR12/2012 challenges to effective market surveillance.

The Flash Crash and market surveillance drivers propelled CAT as a mission critical project for the SEC. It will cost several hundred million dollars to build. The expected annual maintenance cost is more than a billion dollars. Yet, we despise unnecessary duplicating or triplicating of data that increase vulnerability of hackers’ attacks. We also despise the burden on broker-dealers to report data to a “stale vault” when data could have been analyzed directly at its originating source. Given that, we have a solution that draws on an analogy from H&R Block for CAT data collection and combating fraud.