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FINRA Assumes NYSE Regulation Market Oversight Functions

Financial Industry Regulatory Authority (FINRA) has said that it will assume the responsibility of performing the market surveillance and enforcement functions currently being conducted by NYSE Regulation, following the conclusion of its agreement with NYSE Euronext.

Under the agreement, FINRA will assume regulatory functions for NYSE Euronext’s US 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.

NYSE Euronext, through its subsidiary NYSE Regulation, will remain ultimately responsible for overseeing FINRA’s performance of regulatory services for the NYSE markets.

NYSE Euronext 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 are being transferred to FINRA.

Lawrence Leibowitz, COO of NYSE Euronext, said: “Consolidating our surveillance and enforcement functions with those performed by FINRA for other markets is an important step toward creating a consistent and completely integrated approach to regulation.”

Richard Ketchum, chairman and CEO of FINRA, said: “This agreement is a significant step in addressing the fragmented trading environment, which has eroded the ability of regulators to get a complete picture of market activity.

“It will allow FINRA to better capture and analyze data that can help us detect problematic trading activity across multiple markets and financial products. This more holistic, unified approach to regulating trading goes a long way toward strengthening our ability to protect investors – and has multiple benefits for the markets.”