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SEC: NYSE To Pay $14 Million Penalty For Regulatory Violation

The Securities and Exchange Commission Tuesday said 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 exchanges have 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 applying price collars during unusual market volatility on August 24, 2015, 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," said 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."

by RTT Staff Writer

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