The Securities and Exchange Commission has slapped a $14 million fine on the New York Stock Exchange over a series of breakdowns and regulatory violations, a sign that the US regulatory body intends to hold the nation's exchanges accountable for disruptive market events.
The charges arise from five separate investigations including a market-wide outage in 2015 and a chaotic trading day a month later exacerbated by the implementation of price collars without a rule in effect to permit them - a move that resulted in order imbalances being resolved more slowly.
“Exchanges play an important role in protecting investors,” says Stephanie Avakian, co-director of the SEC’s Division of Enforcement. “For retail investors to have confidence in our markets, exchanges must provide accurate information and comply with legal requirements, including being equipped for unexpected market disruptions.”
The SEC’s order also finds that Nyse-operated exchanges broke rules regarding business continuity and disaster recovery in violation of Regulation SCI, which was instituted in an attempt to strengthen the technology infrastructure and integrity of the US securities markets.
“Two Nyse exchanges previously settled rule-filing violations in 2014, and now we’ve found further problems,” says Steven Peikin, co-director of the SEC’s Division of Enforcement. “Nyse’s violation of the prior SEC order was a significant factor in assessing the civil penalties in this matter.”