Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Wednesday, October 27, 2010

SEC Scheduled to Consider Risk Management Controls for Broker-Dealers with Market Access

The next Open Meeting of the SEC will be held on November 3, 2010.  The subject matter of the Open Meeting will be:

The Commission will consider whether to adopt new Rule 15c3-5, Risk Management Controls for Brokers or Dealers with Market Access, under the Securities Exchange Act of 1934. The new rule would require brokers or dealers with access to trading directly on an exchange or alternative trading system (ATS), including those providing sponsored or direct market access to customers or other persons, to implement risk management controls and supervisory procedures reasonably designed to manage the financial, regulatory, and other risks of this business activity. Among other things, new Rule 15c3-5 would effectively prohibit broker-dealers from providing "unfiltered" or "naked" sponsored access to any exchange or ATS.
 
The Commission will consider whether to propose a new rule under Section 763(g) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, to prohibit fraud, manipulation, and deception in connection with security-based swaps.
 
The Commission will consider whether to propose rules and forms to implement Section 21F of the Securities Exchange Act of 1934 (Exchange Act) entitled "Securities Whistleblower Incentives and Protection." Section 21F, as added by Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, provides that the Commission shall pay awards, under regulations prescribed by the Commission and subject to certain limitations, to eligible whistleblowers who voluntarily provide the Commission with original information about a violation of the federal securities laws that leads to the successful enforcement of a covered judicial or administrative action, or a related action.

http://lawprofessors.typepad.com/securities/2010/10/sec-scheduled-to-consider-risk-management-controls-for-broker-dealers-with-market-access.html

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