SIFMA Objects to the SEC's Proposed Reinterpretation of the Term "Exchange"

SIFMA and SIFMA Asset Management Group ("SIFMA AMG") raised objections to the SEC proposal to reinterpret the term "exchange" as used in the Securities Exchange Act. As previously covered, the proposal redefines the term "exchange" and would amend SEA Regulation ATS ("Alternative Trading Systems") and SEA Rule 3b-16 ("Definitions of terms used in Section 3(a)(1) of the Act").

In its comments on the proposed amendments to the rule, SIFMA supported (i) rescinding the exemption from Regulation ATS for Government ATSs; (ii) requiring Government ATSs to file specific ATS forms which would be made available to the public; and (iii) reasonable fair access requirements for Government ATSs that reach specified volume thresholds. However, SIFMA argued that the current proposal goes beyond the regulatory gaps identified by the SEC, and provides an insufficiently short comment period.

SIFMA AMG described the proposal's terms as inadequately defined or inappropriately written and stated that no expansion of the definition of "exchange" is warranted. SIFMA AMG also noted the short comment period as insufficient given the scope of the proposed changes.