On November 19, 2014, the US Securities and Exchange Commission (“SEC”) voted to approve new rules aimed at strengthening the technology infrastructure of the US securities markets. The rules known collectively as Regulation Systems Compliance and Integrity (“Regulation SCI”) impose requirements on certain market participants in order to reduce the number of systems issues and mitigate negative market effects when such issues do occur.
Under Regulation SCI, key market participants that will be required to have extensive policies and procedures in place for their technological systems include self-regulatory organizations, certain alternative trading systems, plan processors and certain exempt clearing agencies. The new rules become effective 60 days after publication in the Federal Register. Entities subject to Regulation SCI generally must comply with the requirements nine months after the effective date.