NYSE Group Inc. said Thursday that an audit of its trading safeguards found that policies and procedures are "reasonably designed" and effective in detecting and stopping trading violations.

However, the operator of the New York Stock Exchange said there is no guarantee the exchange's regulations can stop a future trading scandal similar to the one that occurred in 2005. NYSE Group issued the caution in its 2006 annual report filed with the Securities and Exchange Commission.

Federal regulators cracked down on the exchange and former floor traders in 2005 for unlawful trading. The SEC said the exchange had failed to stop specialists, or floor traders, from bilking investors out of more than $158 million.

The traders improperly traded in several ways, including trading ahead of customer orders and "interpositioning" their firms' dealer accounts between customer orders, the SEC said.

The SEC reached a settlement with NYSE Group that in part required the company to set up a $20 million reserve fund to retain an auditor to conduct audits of the exchange's regulatory programs every two years through 2011.

The regulatory auditor, James H. Cheek III of Bass, Berry & Sims PLC, reported to NYSE Group on March 15, according to the annual report filed Thursday. The audit covered the two years ended Dec. 31, 2006.