2023-05775: Regulation Systems Compliance and Integrity

Summary

The Securities and Exchange Commission ("Commission" or "SEC") is proposing amendments to Regulation Systems Compliance and Integrity ("Regulation SCI") under the Securities Exchange Act of 1934 ("Exchange Act"). The proposed amendments would expand the definition of "SCI entity" to include a broader range of key market participants in the U.S. securities market infrastructure, and update certain provisions of Regulation SCI to take account of developments in the technology landscape of the markets since the adoption of Regulation SCI in 2014. The proposed expansion would add the following entities to the definition of "SCI entity": registered security-based swap data repositories ("SBSDRs"); registered broker-dealers exceeding an asset or transaction activity threshold; and additional clearing agencies exempted from registration. The proposed updates would amend provisions of Regulation SCI relating to systems classification and lifecycle management; third party/vendor management; cybersecurity; the SCI review; the role of current SCI industry standards; and recordkeeping and related matters. Further, the Commission is requesting 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 Regulation SCI.

The agency’s own summary, as published.

What this changes

Amends 2 parts of the Code of Federal Regulations — the standing rules this notice rewrites.

• 17 CFR 242 Regulations M, Sho, ATS, AC, NMS, SE, and SBSR, and Customer Margin Requirements for Security Futures
• 17 CFR 249 Forms, Securities Exchange Act of 1934