NYSE Turns to Its Subsidiary for Surveillance, Investigation and Enforcement Instead of FINRA

The group will not extend its contract with the Financial Industry Regulatory Authority and its NYSE Regulation will directly perform

NYSE Group, a wholly-owned subsidiary of Intercontinental Exchange (NYSE: ICE), today announced NYSE Regulation will directly perform the market surveillance, investigation and enforcement functions for NYSE Group’s three equities exchanges and two options exchanges upon the expiration of the contract with the Financial Industry Regulatory Authority (FINRA) on December 31, 2015.

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The group explains that NYSE Regulation already performs or oversees FINRA’s performance of various regulatory duties on behalf of the New York Stock Exchange, NYSE Arca and NYSE MKT, including administering surveillance, enforcement, and disciplinary programs to ensure member firms’ compliance with exchange rules and federal securities laws, as well as monitoring and enforcing compliance by listed companies with listing standards. It is a wholly-owned subsidiary of New York Stock Exchange LLC.

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FINRA can trace its origin to 1939 when the National Association of Securities Dealers (NASD) was created with a mandate to protect American investors. In 2007, NASD consolidated with the member regulation, enforcement and arbitration functions of the NYSE to become FINRA. The authority will retain the cross-market surveillance and investigation functions and will continue to conduct the registration, testing and examinations of broker-dealer members of NYSE Group’s exchanges.

“NYSE Group supports the independent decision by NYSE Regulation’s board that NYSE Regulation will directly perform the surveillance, investigation and enforcement functions for NYSE Group’s exchanges as we believe the effectiveness of these functions is integral to the operation of our exchanges and to market integrity, fairness and investor confidence,” said NYSE Group President, Thomas W. Farley .

“NYSE Regulation is expanding its market surveillance, investigation and enforcement capabilities to oversee and enforce a robust regulatory program for NYSE Group’s exchanges. We believe our expertise and proximity to the markets being regulated will enhance effective surveillance and rule enforcement,” said NYSE Regulation CEO, Mary Brienza .

It was also announced that NYSE Regulation has appointed Adam J. Wasserman as NYSE Regulation Head of Enforcement. Mr. Wasserman was previously a partner in the New York office of the law firm Dechert LLP, where he was a senior member of its White Collar and Securities Litigation Group.

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