Amazon lands significant cloud deal with regulator to oversee U.S. securities trading

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LAS VEGAS — Inc. has preached the power of the cloud in managing mountains of data.

On Wednesday, it announced a whopper of a deal that puts its philosophy to the test: Amazon Web Services is teaming with FINRA CAT LLC, a subsidiary of the Financial Industry Regulatory Authority, to oversee trading in U.S. securities markets that would ingest more than 100 billion market events daily from 22 stock exchanges and 1,500 broker dealer firms. Executives from both companies shared the news with MarketWatch exclusively at the re:Invent conference in an interview late Tuesday.

“The [Consolidated Audit Trail] will provide a single comprehensive view of U.S. equities and listed options markets, as well as new tools to reconstruct market activity and maintain fair and orderly trading systems,” Teresa Carlson, vice president of worldwide public sector at AWS, said.

The deal’s significance extends beyond data analysis and management, Scott Donaldson, FINRA CAT’s chief technology officer, told MarketWatch. It will ultimately protect investors by improving the ability of regulators to oversee trading in U.S. securities markets.

Amazon AMZN, +1.04%  , which lost out to Microsoft Corp. MSFT, +0.26%  in bidding for a $10 billion cloud-computing deal with the Pentagon that it is challenging in court, has built a $25 billion cloud business in part on the strength of its public-sector contracts. Its latest with FINRA — one of the first big financial firms to move to the computing cloud — is among its most ambitious, Carlson told MarketWatch.

“They need to do the work of the market to understand it” as a regulator, she said.

AWS and FINRA CAT developed their system after closely working together, part of a deeply ingrained business practice that Amazon has adopted with its customers to innovate specialized applications.

“It’s all about enabling builders [customers],” AWS CTO Werner Vogels told MarketWatch in a separate interview.

“Old-style IT providers gave you a prefabricated house to live in,” Vogels said. “We are all about giving you all the tools to build the type of house you want to live in.”