United States of America: Announced SEC proposal to amend Regulation Systems Compliance and Integrity (SCI)

On 15 March 2023, the US Securities and Exchange Commission (SEC) announced proposed amendments to the Regulation Systems Compliance and Integrity (SCI). The goal is to help address technological vulnerabilities in the US securities markets and improve Commission oversight of the core technology of key US securities markets entities. The proposed amendment would expand the scope of SCI entities to include registered security-based swap data repositories, all clearing agencies that are exempt from registration, and certain large broker-dealers. In addition, the amendment would require that an SCI entity’s policies and procedures include the maintenance of a written inventory and classification of all SCI systems and a program for life cycle management, a program to prevent unauthorized access to those systems and information, and a program to manage and oversee certain third-party providers. Finally, the amendment would expand the types of SCI events experienced by an SCI entity that would trigger immediate notification to the Commission, update the rule’s annual SCI review and business continuity and disaster recovery testing requirements, and update certain of the Regulation’s record-keeping provisions. The proposed amendments will be subject to consultation once released in the Federal Register.