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June 13, 2023

SEC Proposal Will Help Protect Investors and Markets from Technology Failures and Market Disruptions

WASHINGTON, D.C.—Legal Director and Securities Specialist Stephen Hall issued the following statement on the filing of Better Markets’ Comment Letter to the Securities and Exchange Commission (SEC) in response to the agency’s proposed rule to bolster the security and resiliency of the technology infrastructure of the U.S. securities markets:

“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.

“That’s why these upgrades to the SEC’s existing rules are so important, as they will help preserve the resiliency and security of the technology that underlies the U.S. securities markets in a rapidly evolving world. These safeguards 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.

“The proposed rule should also be strengthened in some respects. Specifically, the Commission should expand the coverage of the rule to additional entities, including ATSs and broker-dealers with significant transaction activity in corporate debt or municipal securities. The Commission should also require that annual system reviews be performed by an independent third party, and it should further require that senior management must vouch for those reviews through certifications.”

Read our full comment letter here.


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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