SIFMA Submits Comments to SEC Regarding SIPs and Operational Resiliency

SIFMA submitted a letter to SEC Chair Mary Jo White in response to her recent statement on the SEC's review of Securities Information Processors ("SIPs") in light of the August 22, 2013 SIP outage that led to a halt in the trading of NASDAQ-listed securities.

According to the SIFMA, the August 22 events highlighted the "critical nature of the SIPs in maintaining fair and orderly markets," and emphasized "the need for regulators and market participants to coordinate and collaborate to make sure the markets are operationally resilient and robust." SIFMA commended the SEC's initiative in examining critical market structure as well as its call for SROs to work with broker-dealers as they develop proposals for enhancing SIPs.

Additionally, SIFMA noted that the August 22 SIP outage is a "symptom of the outdated system by which critical market data is controlled and distributed." The letter urged the SEC to examine SIPs more broadly and develop action plans to (i) revamp governance, (ii) increase transparency in operations, and (iii) provide for increased efficiencies. SIFMA stated that, as the review of market structure moves from preliminary concepts to more concrete proposals, it is imperative that the broker-dealer community continue to play an active role.

See: SIFMA Comment Letter; SIFMA Press Release. Related news: NASDAQ Halts Trading Securities due to Tech Glitch (August 22, 2013); SEC Chairperson Mary Jo White Issues Statement at Exchange Leaders Meeting Regarding Technology of Market Infrastructure (September 12, 2013); SEC Chair White Delivers Speech on Equity Market Structure (with Lofchie Comment) (October 2, 2013).