In Landmark Action, NYSE Settles with SEC Over Data Feed Allegations
Beginning in 2008 and extending through the middle of 2010, NYSE was found to have sent data through two proprietary feeds before making that data public, owing to insufficient monitoring of data transmission.
Regulation NMS (National Market System), the set of SEC rules pertinent to the action, disallows the sending of market data to customers before it is included in consolidated feeds, which distribute data of trades and quotes to the public. NYSE Euronext points out that the resulting improper head start was, in most cases, measurable in milliseconds.
The settlement brings an end to an action that was the first of its kind brought against an exchange. "The violations at NYSE may have been technological, but they were not technical. Robust technology governance is just as important to preventing investor harm as any other compliance or supervisory function," says Daniel M. Hawke, Chief of the SEC Enforcement Division's Market Abuse Unit.
"NYSE Euronext is pleased to have this matter resolved, and believes that the settlement is in the best interest of its shareowners, clients and employees. We will continue to take every responsible measure to ensure that our market operates with the utmost fairness and transparency," says the exchange operator's CEO, Duncan Niederauer.
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