Regulation Systems Compliance and Integrity
Summary
SIFMA provided comments to the U.S. Securities and Exchange Commission (SEC) on their proposal to amend Regulation Systems Compliance and Integrity to, among other things, expand the scope of “SCI entities” to include registered broker-dealers that exceed either a total assets threshold or a transaction activity threshold in certain securities and update multiple provisions of Reg SCI.
Excerpt
June 13, 2023
By Electronic Submission
Vanessa Countryman
Secretary
Securities and Exchange Commission
100 F Street NE
Washington, DC 20549-1090
Re: File No. S7–07-23
Regulation Systems Compliance and Integrity
Dear Ms. Countryman:
The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to comment on the proposal of the Securities and Exchange Commission (the “Commission”) to amend Regulation Systems Compliance and Integrity (“Reg SCI”) to, among other things, expand the scope of “SCI entities” to include registered broker-dealers that exceed either a total assets threshold or a transaction activity threshold in certain securities (“proposed SCI broker-dealers”) and update multiple provisions of Reg SCI (the “Proposal”).2
SIFMA supports the broad policy objectives of enhancing the resilience of the U.S. securities markets and strengthening the technological infrastructure underlying those markets. To that end, we have supported the application of Reg SCI to the critical functions carried out by exchanges, registered clearing agencies, the Financial Industry Regulatory Authority (“FINRA”), and securities information processors upon which our members must rely or with whom they must work to fulfill regulatory obligations. Importantly, our members—including those who expect to become SCI broker-dealers under the Proposal—have already developed robust technological resiliency as a result of various existing regulatory obligations and market forces to which they are already subject. These developments have come about without the imposition of additional requirements established by the Commission under Reg SCI. We have contrasted the overlap of existing regulations that apply to proposed SCI broker-dealers in the Appendix. Any regulations from the SEC should harmonize with existing regulation.
1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit https://www.sifma.org.
2 See Regulation Systems Compliance and Integrity, 88 Fed. Reg. 23,146 (proposed Apr. 14, 2023) (hereinafter “Proposing Release”).