ATS – Proposed Investor Protection Enhancements & Cybersecurity

Proposal To Enhance Investor Protections And Cybersecurity For Alternative Trading Systems Trading Treasuries And Other Government Securities

The Securities and Exchange Commission announced proposed rules to better protect investors and enhance cybersecurity by bringing more Alternative Trading Systems (“ATS”) that trade Treasuries and other government securities under the regulatory umbrella.

The proposal builds upon a 2020 proposal and public comments received in response to that proposal. It would extend Regulation ATS to include systems that offer the use of non-firm trading interest and provide protocols to bring together buyers and sellers for trading any type of security. These Communication Protocol Systems would be required to either register as exchanges or register as broker-dealers and comply with Regulation ATS.

With ATSs becoming increasingly important to government securities trading, the proposal would expand the investor protections of Regulation ATS to those that trade government securities or repurchase and reverse repurchase agreements on government securities. Additionally, the proposal would expand Regulation Systems Compliance Integrity (“SCI”) to government securities to help increase investor protections and address technological vulnerabilities while improving the SEC’s oversight of the core technology of key entities in the markets for government securities.

Source: SEC.gov

Kehoe Law Firm, P.C.