On November 3rd, the SEC approved new Rule 15c3-5 under the Securities Exchange Act of 1934. The rule requires brokers or dealers with access to trading securities directly on an exchange or alternative trading system, including those providing sponsored or direct market access to customers or other persons, and broker-dealer operators of an ATS that provide access to trading securities directly on their ATS to a person other than a broker or dealer, to establish, document, and maintain a system of risk management controls and supervisory procedures reasonably designed to systematically limit the financial exposure of the broker or dealer that could arise as a result of market access; and ensure compliance with all regulatory requirements that are applicable in connection with market access. The Rule effectively prohibits giving customers "unfiltered" sponsored access -- access without the application of any pre-trade filters or controls -- by requiring the controls and procedures to be under the "direct and exclusive control" of the broker-dealer with market access (except for a limited exception to allow reasonable allocation of certain controls and procedures to another registered broker-dealer). The sponsoring broker-dealer will also be required to regularly review the effectiveness of its controls and procedures, and promptly address issues, and will be required to perform and document, at least annually, a review of its activities relating to market access to ensure the overall effectiveness of the controls and procedures. The sponsoring broker-dealer's Chief Executive Officer will be required to certify annually that the controls and procedures comply with the Rule and that the required review has been conducted. The new rule will be effective 60 days after publication in the Federal Register, which is expected during the week of November 8. SEC Release No. 34-63241; SEC Press Release.