NYSE Pays SEC $5 Million Settlement Over Datafeed Timings
![duncan-niederauer-nyse-db duncan-niederauer-nyse-db](/sites/default/files/styles/landscape_750_463/public/import/IMG/213/163213/duncan-niederauer-nyse-db-580x358.jpg.webp?itok=QlsZIu64)
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.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
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. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
Finra clears hurdle with CAT launch, but several others remain
Two major components of the consolidated audit trail are now in place. But wrangling over the CAT’s future continues.
Bloomberg, industry bodies push back on Cboe’s proposed OEMS rule change
Some industry bodies disagree with the options exchange’s proposal to carve its Silexx OEMS out of the SEC’s definition of an exchange facility and place it into a separate business line.
GenAI: US Fed reveals its five use cases
Internal sandbox used to assess viability and risks; coding and content generation on the agenda.
Zeros and ones: Industry contemplates T+0 as the next step
With the North American transition to T+1 settlement complete, same-day settlement could be the next goalpost set, though skeptics are many.
The IMD Wrap: Déjà vu as exchange data industry weighs its options
Max highlights some of WatersTechnology’s recent reporting on data costs and capacity issues facing the options industry, and asks, haven’t we seen this before somewhere?
FRTB data quality issues persist amid shifting implementation dates
Banks are finding market and reference data challenges posed by the FRTB’s standardized model tricky, compounded by uncertainty over when the regulation will take effect.
Cboe pushes rule change to make way for proprietary Opra alternatives
As US options data has grown in volume and cost, Cboe says changing the public feed's governing document would make way for more competition from private alternatives, including its Cboe One Options Feed, launched in 2023.
Regulators urged to promote cyber security investment
Public interest in stopping cyber attacks that could trigger bank runs, says Bundesbank researcher