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: https://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
Doing a deal? Prioritize info security early
Engaging information security teams early in licensing deals can deliver better results and catch potential issues. Neglecting them can cause delays and disruption, writes Devexperts’ Heetesh Rawal in this op-ed.
SEC pulls rulemaking proposals in bid for course correction
The regulator withdrew 14 Gensler-era proposals, including the controversial predictive data analytics proposal.
Trading venues seen as easiest targets for Esma supervision
Platforms do not pose systemic risks for member states and are already subject to consistent rules.
The Consolidated Audit Trail faces an uncertain fate—yet again
Waters Wrap: The CAT is up and running, but with a conservative SEC in place and renewed pressure from politicians and exchanges, Anthony says the controversial database faces a death by a thousand cuts.
Exchanges plead with SEC to trim CAT reporting requirements
Letters from Cboe, Nasdaq and NYSE ask that the new Atkins administration reduce the amount of data required for the Consolidated Audit Trail, and scrap options data collection entirely.
EU banks want the cloud closer to home amid tariff wars
Fears over US executive orders have prompted new approaches to critical third-party risk management.
Friendly fire? Nasdaq squeezes MTF competitors with steep fee increase
The stock exchange almost tripled the prices of some datasets for multilateral trading facilities, with sources saying the move is the latest effort by exchanges to offset declining trading revenues.
Europe is counting its vendors—and souring on US tech
Under DORA, every financial company with business in the EU must report use of their critical vendors. Deadlines vary, but the message doesn’t: The EU is taking stock of technology dependencies, especially upon US providers.