On March 15th, the SEC proposed amendments to expand the scope of entities subject to Regulation Systems Compliance and Integrity (Regulation SCI) under the Securities Exchange Act and to update a number of the requirements under the regulation. The proposed amendments both consider the changes in technology and trading since the regulation was adopted in 2014 and help to enhance to strengthen the technology framework of the US securities markets.
The proposed expansion would add registered security-based swap data repositories (SBSDRs), registered broker-dealers exceeding an asset or transaction activity threshold, and additional clearing agencies exempted from registration to the definition of “SCI entity”.
Should the proposed updates be adopted, they would amend provisions of Regulation SCI concerning:
systems classification and lifecycle management
the SCI review
the role of current SCI industry standards
recordkeeping and related matters
The SEC is also soliciting comment on whether Regulation SCI should apply to significant-volume ATSs and/or broker-dealers using electronic or automated systems for trading corporate debt securities or municipal securities.
The proposal is open for public comment for 60 days after the date of publication of the proposing release in the Federal Register. To submit feedback, interested parties may use the SEC’s internet comment form or send an email to email@example.com with the File Number File No. S7-07-23 in the subject line.