Securities Law Prof Blog

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

Friday, March 8, 2013

SEC Proposes Rules to Improve Systems Compliance and Integrity

The SEC unanimously proposed new rules to require certain key market participants to have comprehensive policies and procedures in place surrounding their technological systems. The SEC’s proposed Regulation SCI would replace voluntary compliance programs with enforceable rules designed to better insulate the markets from vulnerabilities posed by systems technology issues.

Self-regulatory organizations, certain alternative trading systems, plan processors, and certain exempt clearing agencies would be required to carefully design, develop, test, maintain, and surveil systems that are integral to their operations. The proposed rules would require them to ensure their core technology meets certain standards, conduct business continuity testing, and provide certain notifications in the event of systems disruptions and other events.

The SEC will seek public comment for 60 days after publication in the Federal Register.

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