In a letter filed today with the US Securities and Exchange Commission in response to the Regulation Systems Compliance and Integrity Expansion Proposal (Reg SCI), the FIA Principal Traders Group (FIA PTG) said that the SEC has not justified expanding Reg SCI to broker-dealers nor has it adequately considered alternatives and the impact on competition.
The FIA PTG letter expounds on the following points: expanding Reg SCI to broker-dealers is not justified by actual market experience; using a 10% transaction activity threshold does not achieve the Commission’s goal of preventing market-wide disruptions; the current regulatory baseline includes a robust framework of SRO rules and guidance that already address operational resiliency; the Commission should explore alternatives that reduce the high regulatory burden on SCI broker-dealers; and economic consequences including the impact on competition are not necessary or appropriate. Compliance for SCI broker-dealers will be extremely costly.
FIA PTG urged the Commission to seek alternatives to the Reg SCI Proposal that are less burdensome and anti-competitive.
Read the full letter here.
