The Securities Industry and Financial Markets Association (SIFMA) responded to the Securities and Exchange Commission’s (SEC’s) proposal to amend Regulation Systems Compliance and Integrity (Reg SCI). Among other things, the rule change would 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.
Key issues detailed in the response include:
- The proposed thresholds used to define SCI broker-dealers are arbitrary, anticompetitive, and burdensome
- The Proposal would create a new trading requirement for proposed SCI broker-dealers
- RegSCI was not meant for and cannot simply be imposed on broker-dealers as is
- The enormous cost of Reg SCI is not justified by any tangible benefits identified by the SEC
- The proposed requirements regarding third-party providers require a more principles- and risk-based approach
Read our interview with ITRS highlighting RegSCI and similar global regulatory proposals