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NYSE to pay $14M for regulatory failures, violation of Reg SCI

Joe Mont | March 12, 2018

On March 6, the Securities and Exchange Commission announced that it has 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 arose from five separate investigations and include the first-ever charged violation of Regulation SCI.

The Commission adopted Regulation SCI to strengthen the technology infrastructure and integrity of the U.S. securities markets. Two NYSE exchanges were charged with violating its business continuity and disaster recovery requirements. In settlement, the exchanges agreed to pay a $14 million penalty.

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...

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