NYSE Post Trade Review

On Mar. 11, NYSE memo on post-trade review for possible fraud.

  • Under CEA Rule 15c3-5 on market access, members must review trades for
    potentially manipulative, disruptive, and/or other improper conduct on them.
  • Follows guidance by exchange, new guide is read in conjunction.

Risk Management Guide

  • On post-trade reviews, use third-party risk management technology, software.
  • Also investigation and follow up, allocating post-trade reviews to broker-dealers.

Post Trade Reviews

  • Member must have policies unless allocated to individual broker-dealers per rules.
  • Based on facts and circumstances need supervisory systems, internal controls
    specifically tailored to business model tailored supervisory, surveillance procedures.
  • If third-party used, can rely on it but must do due diligence ensure appropriate.

Investigation and Follow Up, Allocation

  • Gathering information not sufficient, should do their own investigations, follow-up into why exceptions are taking place, reach out to customers may be necessary.
  • Not at face value, may need documentation, other evidence to support or refute.
  • Could allocated to registered dealer client some functions, including reviews, but
    need do due diligence and see it has better access, be specific about allocation.