NYSE Euronext, has announced that it has reached a settlement agreement with the SEC relating primarily to alleged violations by New York Stock Exchange LLC of Rule 603(a) of Regulation NMS, a rule governing the timing of delivery of certain exchange market data. The SEC also alleged that NYSE failed to retain certain computer files in violation of SEC record-keeping requirements. NYSE Euronext entered into the settlement without admitting or denying the SEC’s allegations. In accordance with the settlement, NYSE Euronext has agreed to pay a $5 million fine, to retain an independent consultant to evaluate NYSE Euronext’s U.S. exchanges’ current Rule 603(a) compliance systems, and to implement the consultant’s recommended improvements.
The SEC’s allegations focused primarily on differentials in the speed of NYSE’s delivery of market data from 2008 through mid-2010. The SEC alleged that, at certain times during that period, NYSE delivered market data through two proprietary data feeds slightly faster than it delivered market data to the consolidated tape. The alleged timing differentials, which were generally at the level of milliseconds, were the result of technology issues that have been resolved.
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The SEC does not allege any intentional misconduct or that the NYSE data delays caused any investor harm. NYSE completed systems modifications in 2010 and 2011 that eliminated the technology issues that were the subject of the investigation. NYSE also now preserves the computer files that were the subject of the records-retention charge.
NYSE Euronext Chief Executive Officer Duncan L. Niederauer said, “NYSE Euronext is committed to the highest standards of integrity and accountability. The timing differentials stemmed from technology issues, not from intentional wrongdoing by the exchange or any of its personnel.
“NYSE Euronext is pleased to have this matter resolved, and believes that the settlement is in the best interest of its shareowners, clients and employees. We will continue to take every responsible measure to ensure that our market operates with the utmost fairness and transparency.”