The Securities Industry and Financial Markets Association (SIFMA) and its member firms sent a letter to the Securities and Exchange Commission’s Division of Trading and Markets director, Brett Redfearn, asking for regulatory relief.
Among these requests are:
Regulation SHO: In light of DTCC’s suspension of all physical processing services, limited relief with respect to Regulation SHO’s locate and closeout requirements consistent with that granted after Hurricane Sandy in 2012 would be appropriate. SIFMA noted that just as in 2012, physical certificates are not available and it is unclear when they will be available.
DTCC processing of physical securities: Impacted firms may require related relief from physical processing timelines, good control location treatment, and regulatory reporting requirements. Broker-dealers are subject to a variety of rules related to defined timeframes associated with the delivery of physical and other securities. These include Rule 15c3-3, Uniform Practice Code Buy-In rules and Regulation T. Broker-dealers are therefore asking for no-action relief during this time period for any failure to comply with physical processing timelines, possession or control, and regulatory reporting requirements related to DTCC’s suspension of physical processing.