On October 6, the NYSE Group announced that the board of NYSE Regulation had determined to take back market surveillance functions for its three US equities exchanges and two options exchanges from the Financial Industry Regulatory Authority (FINRA) following the expiration of its contract with FINRA on December 31, 2015. NYSE Regulation selected Cinnober Financial technology as a principal technology provider in the development of an enhanced surveillance system.
FINRA will retain responsibility for cross-market surveillance and investigation functions and will continue to conduct the registration, testing and examinations of broker-dealer members of the exchanges. FINRA has performed the market surveillance functions for these markets since 2010.
NYSE Group indicated its support for this decision because of the importance of this function to the Exchanges’ operations and market integrity.
It is an interesting development for other marketplaces which have sought to adopt uniform market surveillance practices and to share the costs of investments in systems, including data processing and storage capabilities, and experienced surveillance staff.
