On November 19, 2014, the U.S. Securities and Exchange Commission (SEC) unanimously adopted Regulation Systems Compliance and Integrity (Regulation SCI) under the Securities Exchange Act of 1934 (Exchange Act). Regulation SCI applies to an “SCI entity,” which includes certain self-regulatory organizations (SROs) (including registered clearing agencies), certain alternative trading systems (ATSs), plan processors, and exempt clearing agencies subject to the SEC’s Automation Review Policy statements (ARP). SCI entities are the market participants that the SEC considers the most essential to the U.S. securities markets’ efficient functioning. The SEC is addressing five key aspects of “SCI systems”2 through Regulation SCI: capacity, integrity, resiliency, availability, and security.

An SCI entity must do the following...