Compliance Question? Ask NYSE

NYSE Regulation unveiled Ask Market Surveillance, a software-based legal research tool intended to help floor members and their legal and compliance officers answer questions about NYSE trading rules. "We are putting in one place all of the types of information that are really relevant to [floor members and floor member organizations] who have questions about trading on our floor," says Nancy Reich, VP of market surveillance at NYSE Regulation, the independent regulatory arm of the New York Stock Exchange. The product is nearing the end of a pilot that began in late November with a few NYSE members.

With the NYSE's Hybrid Market and Reg NMS pending, Ask Market Surveillance is particularly relevant now, notes Reich. Member firms and compliance officers likely will have questions about Hybrid interpretation and Reg NMS - the tool will facilitate communication between member firms and the market surveillance staff, she adds.

Ask Market Surveillance has two key attributes: It's a search tool for finding online guidance on NYSE trading rules, and it also is a querying tool for submitting questions to the NYSE's market surveillance staff, explains Reich. Floor members and upstairs compliance staffs can use the tool to comb through online interpretive materials, including the NYSE's constitution and rules, information memos, member education bulletins, floor official manual and hearing panel decisions, as well as previously asked questions and answers.

While all of the information memos and education bulletins currently are available on the NYSE's Web site, firms may not know where to look, Reich suggests. In the past, "Answers to questions of interest to members on the floor had not been published broadly," she says. Now, these materials will be part of a database and searchable in one place, according to Reich, who says the Ask Market Surveillance database and query engine "provide a more user-friendly way to search these documents."

Help Yourself

In the spirit of Ask Jeeves - a public Internet search and querying engine - Ask Market Surveillance encourages self-help on the part of member firms. "We clearly want to do whatever we can to improve the culture of compliance among our members and their member organizations," says Reich. "This will help to do that."

Alternatively, the tool enables member firms to direct a question to the market surveillance staff. The question and answer then will be added to the database. This lets everyone keep on top of the up-to-the-minute questions and answers, Reich says.

Meanwhile, the system helps the regulator ensure that the information it disseminates is consistent. Further, if the staff is receiving a lot of questions on a particular topic, says Reich, "It alerts us that maybe we need a more formal education bulletin."

Member firms will access Ask Market Surveillance via the NYSE's Internet-based EFP (electronic filing platform), which they already use to file quarterly and monthly financial reports. But they will need to sign up for an account. Brokers and specialists located on the floor will have direct access to the tool. But a bulletin on the system warns members that "because answers cannot be provided in real time, users should continue to bring time-sensitive questions directly to the Market Surveillance Division personnel in person on the floor or via telephone." Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio