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June 13, 2023

SEC Proposal Will Help Protect Investors and Markets From Technology Failures and Market Disruption

Better Markets filed a comment letter with the Securities and Exchange Commission in response to the agency’s proposed rule to bolster the security and resiliency of the technology infrastructure of the U.S. securities markets:

Why It Matters. Cyber breaches and technological failures are a constant and growing concern for our markets and millions of investors. Even seemingly minor glitches can produce major disruptions, sidelining key market players and resulting in financial losses and remediation costs. The risks are growing, as the securities markets are increasingly dependent on technology at all stages of market activity, from order routing to clearing, reporting, and record-keeping. And the threat intensifies as the interconnections between market participants grow and threats to one firm become threats to many others.

What We Said. The safeguards included in the SEC’s proposal are essential for maintaining the high level of investor confidence on which the markets depend. The proposed rule would expand the coverage of existing rules to new classes of participants, including large broker-dealers, registered securities-based swap data repositories, and all clearing agencies exempt from registration.  The rule would also ensure that key market participants account for their rising use of third-party service providers, the escalating number of attempts to gain unauthorized access to their systems, and the growing number of potential vulnerabilities and flaws in those systems.

Bottom Line.  The upgrades to the SEC’s existing rules will help preserve the resiliency and security of the technology that underlies the U.S. securities markets in a rapidly evolving world.

Read our full Comment Letter here or click the button below.


Comment Letters

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