Spotlight on Regulation SCI

About Regulation Systems Compliance and Integrity

Background

The U.S. Securities and Exchange Commission adopted Regulation Systems Compliance and Integrity and Form SCI in November 2014 to strengthen the technology infrastructure of the U.S. securities markets. Specifically, the rules are designed to:

• Reduce the occurrence of systems issues;
• Improve resiliency when systems problems do occur;
• Enhance the Commission's oversight and enforcement of securities market technology infrastructure.

Who Regulation SCI applies to

Regulation SCI applies to "SCI entities," a term which includes self-regulatory organizations ("SROs"), including stock and options exchanges, registered clearing agencies, FINRA and the MSRB, alternative trading systems ("ATSs"), that trade NMS and non-NMS stocks exceeding specified volume thresholds, disseminators of consolidated market data ("plan processors"), and certain exempt clearing agencies.

What Regulation SCI applies to

Regulation SCI applies primarily to the systems of SCI entities that directly support any one of six key securities market functions - trading, clearance and settlement, order routing, market data, market regulation, and market surveillance ("SCI systems"). Subject to certain exceptions, the compliance date of Regulation SCI is nine months after the effective date of the regulation, or November 3, 2015.