The Securities and Exchange Commission (SEC) proposes to amend Regulation Systems Compliance and Integrity (Reg SCI) to update and expand the regulatory oversight of the core technology of the U.S. securities markets. The SEC proposes to expand the definition of “SCI entity” to include registered broker-dealers exceeding an asset or transaction activity threshold, additional clearing agencies exempted from registration and security-based swap data repositories (SBSDRs). The SEC also requests comment on whether significant-volume alternative trading systems (ATSs) and/or broker-dealers using electronic or automated systems for trading of corporate debt securities or municipal securities should be subject to Reg SCI. In response to the evolution of technology and trading in the U.S. securities markets, the SEC also proposes to update certain provisions in Reg SCI relating to (1) systems classification and lifecycle management, (2) third-party/vendor management, (3) cybersecurity, (4) SCI reviews, and (5) the role of current SCI industry standards. The SEC requests comments on the proposal by June 13, 2023.
SEC Proposes to Expand Reg SCI
Authors
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Andre E. Owens
Partner
Chair, Broker-Dealer Compliance and Regulation Practice
Co-Chair, Securities and Financial Regulation Practice
[email protected] +1 202 663 6350+1 202 663 6350
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