SEC Proposes Amendments to Include Significant Treasury Markets Platforms Within Regulation ATS
The Securities and Exchange Commission proposed new rules to expand regulatory oversight to Alternative Trading Systems trading U.S. Treasuries and government securities, bringing them under Regulation ATS and Regulation SCI.
The SEC proposed new rules to extend Regulation ATS and Regulation SCI to Alternative Trading Systems that trade U.S. Treasuries and government securities, bringing previously unregulated platforms under federal oversight. The proposal targets Communication Protocol Systems that facilitate non-firm trading interest, requiring them to register as either exchanges or broker-dealers and comply with fair access and technology resilience standards. The rules aim to enhance transparency, cybersecurity, and market integrity in the $20 trillion Treasury market.
The Securities and Exchange Commission proposed new rules to expand regulatory oversight to Alternative Trading Systems trading U.S. Treasuries and government securities, bringing them under Regulation ATS and Regulation SCI. The proposal targets Communication Protocol Systems that facilitate non-firm trading interest, requiring them to register as either exchanges or broker-dealers and comply with fair access and technology resilience standards. The rules aim to enhance transparency, cybersecurity, and market integrity in the $20 trillion Treasury market. The proposal builds on a 2020 proposal and responds to public feedback, aiming to close regulatory gaps as ATSs play an increasingly central role in Treasury trading. The rules would also expand the SEC’s technological oversight via Regulation SCI to mitigate systemic risks from infrastructure failures. Public comments will be accepted for 30 days after publication in the Federal Register. The proposal would require these systems to register as exchanges or broker-dealers and comply with Regulation ATS, with key requirements including registration of certain interdealer brokers and compliance with the Fair Access Rule and Regulation Systems Compliance Integrity (SCI).
Exhibits & Attached Documents (2)
Extracted insights
- company communication protocol systems
- company investor protections of regulation ats to those that trade government securities
- company regulation sci to government securities
- agency Securities and Exchange Commission
- Securities and Exchange Commission Proposed Rules To Better Protect Investors and Enhance Cybersecurity
- Proposal Would Extend Regulation ATS to Include Systems That Offer Non-Firm Trading Interest
- Communication Protocol Systems Would Be Required To Register As Exchanges Or As Broker-Dealers
- SEC Put Out Request For Comment On Proposal To Enhance Transparency And Oversight Over ATSs
- Proposal Would Bring Treasury Trading Platforms Under Regulation SCI
- Proposal Would Require Platforms To Comply With Fair Access Rule
- Proposal Would Expand Investor Protections Of Regulation ATS To Those That Trade Government Securities
- Proposal Would Expand Regulation SCI To Government Securities
- Public Comment Period Will Remain Open For 30 Days After Publication
The Securities and Exchange Commission today proposed rules to better protect investors and enhance cybersecurity by bringing more Alternative Trading Systems (ATS) that trade Treasuries and other government securities under the regulatory umbrella. The proposal builds upon a 2020 proposal and public comments received in response to that proposal. It would extend Regulation ATS to include systems that offer the use of non-firm trading interest and provide protocols to bring together buyers and sellers for trading any type of security. These Communication Protocol Systems would be required to either register as exchanges or register as broker-dealers and comply with Regulation ATS. “In 2020, the Commission put out a request for comment on a proposal to enhance transparency and oversight over ATSs that trade government securities,” said SEC Chair Gary Gensler. “Today’s proposal includes the core elements of the 2020 proposal, including registration of certain interdealer brokers (IDBs) in the Treasury markets. It would bring Treasury trading platforms with significant volume under Regulation Systems Compliance Integrity (SCI), a rule that protects for the resiliency of technology infrastructure. It also would require these platforms to comply with the Fair Access Rule, which provides for fair access to platforms and would prohibit platforms from making unfair denials or limitations of access. Beyond that, today’s amendments build upon the 2020 proposal and on feedback from the public.” With ATSs becoming increasingly important to government securities trading, the proposal would expand the investor protections of Regulation ATS to those that trade government securities or repurchase and reverse repurchase agreements on government securities. Additionally, the proposal would expand Regulation SCI to government securities to help increase investor protections and address technological vulnerabilities while improving the SEC’s oversight of the core technology of key entities in the markets for government securities. The proposal will be published in the Federal Register. The public comment period will remain open for 30 days after publication in the Federal Register.
The Securities and Exchange Commission today proposed rules to better protect investors and enhance cybersecurity by bringing more Alternative Trading Systems (ATS) that trade Treasuries and other government securities under the regulatory umbrella. The proposal builds upon a 2020 proposal and public comments received in response to that proposal. It would extend Regulation ATS to include systems that offer the use of non-firm trading interest and provide protocols to bring together buyers and sellers for trading any type of security. These Communication Protocol Systems would be required to either register as exchanges or register as broker-dealers and comply with Regulation ATS. “In 2020, the Commission put out a request for comment on a proposal to enhance transparency and oversight over ATSs that trade government securities,” said SEC Chair Gary Gensler. “Today’s proposal includes the core elements of the 2020 proposal, including registration of certain interdealer brokers (IDBs) in the Treasury markets. It would bring Treasury trading platforms with significant volume under Regulation Systems Compliance Integrity (SCI), a rule that protects for the resiliency of technology infrastructure. It also would require these platforms to comply with the Fair Access Rule, which provides for fair access to platforms and would prohibit platforms from making unfair denials or limitations of access. Beyond that, today’s amendments build upon the 2020 proposal and on feedback from the public.” With ATSs becoming increasingly important to government securities trading, the proposal would expand the investor protections of Regulation ATS to those that trade government securities or repurchase and reverse repurchase agreements on government securities. Additionally, the proposal would expand Regulation SCI to government securities to help increase investor protections and address technological vulnerabilities while improving the SEC’s oversight of the core technology of key entities in the markets for government securities. The proposal will be published in the Federal Register. The public comment period will remain open for 30 days after publication in the Federal Register.