Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Tuesday, July 28, 2009

SEC Removes Requirement of NYSE Surveillance Program to Track Floor Trading

On July 28, 2009, the SEC issued an Order that removes the requirement for NYSE operate an on-floor video and audio surveillance program to track floor trading activity at NYSE trading posts, operated as a pilot, pursuant to the April 12, 2005 Order.  The Order found that:

The Commission has determined that the Pilot Program has played a helpful role in supplementing the NYSE’s routine surveillance, examination, and enforcement programs. While the nature of the NYSE trading has changed significantly in recent years, floor-based trading remains an important component of the NYSE’s current market structure.

The Commission recognizes, however, that allowing the NYSE greater flexibility in its usage of the on-floor surveillance hardware installed pursuant to the Pilot Program and the resulting data would allow it to devote additional resources to regulatory issues that arise. As such, the Commission has determined to amend the Order and to no longer require the NYSE to operate the Pilot Program so that the NYSE may be afforded greater flexibility in determining the appropriate regulatory usage of its audio-visual surveillance technology and data to maximize the potential benefit to the NYSE’s surveillance, examination, and enforcement process.

In the Matter of the New York Stock Exchange LLC (f/k/a "The New York Stock Exchange, Inc.").

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