SEC Increases Scrutiny of Technology Rules

The Securities and Exchange Commission recently adopted new technology rules for the US securities markets. These rules collectively formed Regulation Systems Compliance and Integrity (Regulation SCI) with the objective of increasing investor confidence by strengthening market’s infrastructure and controls to mitigate market disruptions.  Regulation SCI applies to national securities exchanges, FINRA, all registered clearing agencies, higher-volume equity alternative trading systems (ATSs), securities information processors (plan processors), and the Municipal Securities Rulemaking Board, collectively known as “SCI Entities”. The rule’s effective date was February 3, 2015, and primary compliance date is November 3, 2015.

With increased scrutiny of controls around events such as the NYSE Trade Halt on July 8th 2015 referenced in the SEC’s Statement, http://www.sec.gov/news/statement/statement-on-nyse-.html. GMG’s Regulatory Compliance Practice provides clients with innovative solutions to meet Regulation SCI requirements by performing an end-to-end systems readiness assessment, developing a target operating model, and authoring/revising policies and procedures for in-scope systems.  GMG has extensive Regulatory and Compliance client experience in domains impacted by Regulation SCI, including: establishing a Program Management  Office (PMO) to oversee  client engagements, implementing SEC, FINRA and CFTC regulations (i.e. Market Access, Large Trader ID, Suitability, FATCA, and various Dodd Frank initiatives), and drafting policies and procedures to govern existing and new processes.

GMG has supported client initiatives to ensure compliance with the Capacity, Integrity, Resiliency, Availability and Security requirements of Regulation SCI.  The policy and procedural standards GMG has developed facilitate analysis, review and compliance with SCI Regulatory obligations, including new system adoption, Operations, Software development, Testing, Cyber Security, Reporting and Recordkeeping, Escalation and remediation of identified deficiencies, and Coordinated annual business continuity and disaster recovery testing with other SCI Entities.

For additional information on GMG’s Regulatory Compliance Practice and Regulation SCI click here.

Gartland & Mellina Group — A Management Consulting Company