NYSE Pays SEC $5 Million Settlement Over Datafeed Timings
NYSE Euronext paid a $5 million fine Friday, Sept. 14 to settle an action brought by US regulator the Securities and Exchange Commission, which alleged that NYSE provided participants with an improper headstart on certain trading information because two of its proprietary feeds distributed data earlier than the same data was contributed publicly to the Consolidated Tape for a period between 2008 and 2010.
The two feeds affected are OpenBook Ultra, which distributes NYSE's full order book in real time, and PDP Quotes, which contains quotes for each security. The disparities were caused by NYSE's internal architecture, which contained a shorter path for one feed than the path used to contribute data to the CTA, and a software issue that caused delays in the system that contributes data to the CTA.
Regulation NMS (National Market System), the set of SEC rules pertinent to the action, prohibits distribution of market data to customers before it is included in the Consolidated Tape Association feeds, which distribute data of trades and quotes to the public. According to NYSE Euronext officials, the time differences were, in most cases, measurable in milliseconds -- though this sometimes extended to seconds -- and were resolved through technology changes implemented in 2010 and 2011.
The SEC also said that NYSE had inadequate compliance functions in place. As part of the settlement, NYSE has also agreed to retain an independent consultant to evaluate its Reg. NMS compliance processes and to implement the consultant's recommendations.
"We will continue to take every responsible measure to ensure that our market operates with the utmost fairness and transparency," said NYSE Euronext chief executive Duncan Niederauer in a statement.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
New data granularity rules create opportunities for regtech providers
As evidence, Regnology increased its presence in North America with the addition of Vermeg's Agile business—its 8th acquisition in three years—following a period of constriction and consolidation in the market.
Bond tape hopefuls size up commercial risks as FCA finalizes tender
Consolidated tape bidders say the UK regulator is set to imminently publish crucial final details around technical specifications and data licensing arrangements for the finished infrastructure.
The Waters Cooler: A little crime never hurt nobody
Do you guys remember that 2006 Pitchfork review of Shine On by Jet?
Removal of Chevron spells t-r-o-u-b-l-e for the C-A-T
Citadel Securities and the American Securities Association are suing the SEC to limit the Consolidated Audit Trail, and their case may be aided by the removal of a key piece of the agency’s legislative power earlier this year.
BlackRock, BNY see T+1 success in industry collaboration, old frameworks
Industry testing and lessons from the last settlement change from T+3 to T+2 were some of the components that made the May transition run smoothly.
How ‘Bond gadgets’ make tackling data easier for regulators and traders
The IMD Wrap: Everyone loves the hype around AI, especially financial firms. And now, even regulators are getting in on the act. But first... “The name’s Bond; J-AI-mes Bond”
Can the EU and UK reach T+1 together?
Prompted by the North American migration, both jurisdictions are drawing up guidelines for reaching next-day settlement.
Waters Wavelength Ep. 293: Reference Data Drama
Tony and Reb discuss the Financial Data Transparency Act's proposed rules around identifiers and the industry reaction.