Central South Dakota News

WASHINGTON – Today, U.S. Senator Mike Rounds (R-S.D.) and eight Senate Banking Republicans have criticized the Securities and Exchange Commission (SEC) for its proposal to expand Regulation Systems Compliance and Integrity (SCI), slamming it as a move that could burden businesses and retail investors. The senators expressed their concerns in a letter addressed to Chair Gensler, highlighting the potential negative impacts of the SEC's proposal.

In the letter, the senators stated, "The rule appears to be a regulatory solution in search of a problem and could result in significant costs and competitive distortions for a select group of market participants." They further emphasized their worries about the proposal's potential effects on market liquidity, efficiency, and competition.

The senators raised several specific concerns regarding the SEC's proposal, including the lack of evidence demonstrating systemic disruptions caused by broker-dealers, the extensive compliance costs that could be imposed, and the failure to consider the differences between broker-dealer systems and those currently subject to Reg SCI.

According to the joint letter, the senators requested detailed information from the Division of Trading and Markets regarding various aspects of the proposal, including the market failure the SEC aims to address, the analysis of broker-dealer substitutability, the basis for proposed trading asset thresholds, and the estimated cost burden associated with the proposal.

The letter concluded with a call for a briefing on these questions by April 30, 2024, indicating the senators' serious concerns about the potential implications of the SEC's proposed expansion of Reg SCI to broker-dealers.