freshidea - Fotolia
Regulation Systems Compliance and Integrity (Regulation SCI) is a relatively recent set of rules aimed at improving the technological infrastructure that supports U.S. securities market operations. The regulation, which was unanimously voted into adoption by the U.S. Securities and Exchange Commission (SEC) and made effective in February 2015, applies to so-called SCI entities: national securities exchanges, certain high-volume alternative trading systems, clearing agencies, plan processors and self-regulatory agencies such as FINRA and the Municipal Securities Rulemaking Board.
With some exceptions, these entities will need to comply with Regulation SCI's requirements by Nov. 3, 2015. By 2016, industry-wide testing will commence. This means covered entities should make sure to design, develop, test, maintain and monitor their operational systems according to Regulation SCI's standards and best practices. Failure to implement compliant controls and report failures to the SEC could result in legal action against the covered entity.
Today's securities market is growing increasingly reliant on technology and automated systems -- and is very susceptible to cyberthreats. Regulation SCI emphasizes the importance of ensuring the integrity and resiliency of IT systems. As part of our continuing coverage of Regulation SCI, SearchCompliance has put together a visual history of the regulation that highlights the milestones on the road to its adoption:
We want your two cents on Regulation SCI: How significant do you think the impact of Regulation SCI will be on IT systems operations in the securities market? Let us know in the comments section below.
Read more SearchCompliance coverage on Regulation SCI:
Check out information governance expert Jeffrey Ritter's tip on why the rule could help other sectors grappling with high-tech compliance; then, get his take on what the rule's digital compliance requirements mean for the private sector.