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NYSE to Pay $14 Million Penalty for Multiple Violations

Posted on March 6, 2018 at 5:35 PM

The SEC charged the New York Stock Exchange and two affiliated exchanges with regulatory failures in connection with multiple episodes, including several disruptive market events. The charges stem from five separate investigations and include the first-ever charged violation of Regulation SCI.

• The Commission adopted Reg SCI to strengthen the technology infrastructure and integrity of the U.S. securities markets.

• The two NYSE exchanges were charged with violating Reg SCI’s business continuity and disaster recovery requirement.

According to the SEC’s order, the violations include:

• erroneously implementing a market-wide regulatory halt,

• negligently misrepresenting stock prices as “automated” despite extensive system issues ahead of a total shutdown of two of the exchanges, and

• applying price collars during unusual market volatility on Aug. 24, 2015, without a rule in effect to permit them – a move that resulted in order imbalances being resolved more slowly.

• the NYSE exchanges broke rules regarding business continuity and disaster recovery in violation of Regulation SCI and also violated Regulation NMS.

In settlement, the exchanges agreed to pay a $14 million penalty.

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Categories: General