FINRA to Perform NYSE Regulation’s Market Oversight Functions
New York and Washington, DC — NYSE Euronext (NYSE: NYX) and the Financial Industry Regulatory Authority (FINRA) today announced that they have agreed that FINRA will assume responsibility for performing the market surveillance and enforcement functions currently conducted by NYSE Regulation. The agreement is subject to review by the Securities and Exchange Commission.
Under the agreement announced today, FINRA would assume regulatory functions for NYSE Euronext's U.S. equities and options markets – the New York Stock Exchange, NYSE Arca and NYSE Amex. FINRA currently provides regulatory services to the NASDAQ Stock Market, NASDAQ Options Market, NASDAQ OMX Philadelphia, NASDAQ OMX Boston, The BATS Exchange and The International Securities Exchange.
The final agreement is expected to be completed in the next several weeks, with an effective date anticipated to be at or prior to the end of June.
"This agreement will strengthen market regulation by consolidating surveillance and enforcement responsibilities across multiple markets into one regulator," said NYSE Euronext COO Lawrence Leibowitz. "Today, trading is dispersed among numerous venues, and no single regulator has responsibility for monitoring data and pursuing activity across markets. Aggregating our surveillance and enforcement functions with those already performed by FINRA for other markets is an important step on the road to creating a consistent and completely integrated approach to regulation."
"This agreement will improve investor protection by establishing a unified approach to market oversight," said FINRA Chairman and Chief Executive Officer Richard Ketchum. "It allows FINRA to have a more holistic, cross-market approach to regulation that addresses the realities of today's trading environment, which is characterized by fragmented markets, aggressive competition and complex trading strategies. This unified view will better enable regulators to detect problematic activity across multiple markets and financial products, and ensures that audit trail data needed for effective regulation is complete, consistently presented and transparent."
"We look forward to working with our colleagues at NYSE Regulation on a seamless transition and integration of our market oversight teams."
"Today's agreement furthers the consolidation of regulatory services under FINRA that began with the consolidation of NASD and NYSE's member-firm regulation that created FINRA in 2007," said James Duffy, Interim CEO of NYSE Regulation and a member of the FINRA Board of Governors. "Our goal is to protect investors and enhance market integrity by addressing gaps in regulatory coverage and moving toward a unified system of regulation."
NYSE Euronext, through its subsidiary NYSE Regulation, will remain ultimately responsible for overseeing FINRA's performance of regulatory services for the NYSE markets. It will also retain staff associated with rule interpretations, and oversight of listed issuers' compliance with the NYSE markets' financial and corporate-governance standards. The agreement involves approximately 225 staff, most of whom will be transferred to FINRA.
About NYSE Euronext
NYSE Euronext (NYX) is a leading global operator of financial markets and provider of innovative trading technologies. The company's exchanges in Europe and the United States trade equities, futures, options, fixed-income and exchange-traded products. With approximately 8,000 listed issues (excluding European Structured Products), NYSE Euronext's equities markets – the New York Stock Exchange, NYSE Euronext, NYSE Amex, NYSE Alternext and NYSE Arca – represent one-third of the world's equities trading, the most liquidity of any global exchange group. NYSE Euronext also operates NYSE Liffe, one of the leading European derivatives businesses and the world's second-largest derivatives business by value of trading. The company offers comprehensive commercial technology, connectivity and market data products and services through NYSE Technologies. NYSE Euronext is in the S&P 500 index, and is the only exchange operator in the S&P 100 index and Fortune 500. For more information, please visit: http://www.nyx.com.
About the Financial Industry Regulatory Authority
FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business—from registering and educating all industry participants to examining securities firms; writing and enforcing rules and the federal securities laws; informing and educating the investing public; providing trade reporting and other industry utilities; and administering the largest dispute resolution forum for investors and registered firms. For more information, please visit: www.finra.org.
Cautionary Note Regarding Forward-Looking Statements
This press release may contain forward-looking statements, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning NYSE Euronext's plans, objectives, expectations and intentions and other statements that are not historical or current facts. Forward-looking statements are based on NYSE Euronext's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause NYSE Euronext's results to differ materially from current expectations include, but are not limited to: NYSE Euronext's ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk and U.S. and global competition, and other factors detailed in NYSE Euronext's reference document for 2009 ("document de référence") filed with the French Autorité des Marchés Financiers (Filed on April 22, 2010 under No. D.10-0304), 2009 Annual Report on Form 10-K and other periodic reports filed with the U.S. Securities and Exchange Commission or the French Autorité des Marchés Financiers. In addition, these statements are based on a number of assumptions that are subject to change. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by NYSE Euronext that the projections will prove to be correct. This press release speaks only as of this date. NYSE Euronext disclaims any duty to update the information herein.