Last week the SEC voted in favor of new Rule 15c3-5 requiring brokers and dealers to have risk controls and procedures in place prior to providing their customers with direct market access. This new rule prohibits broker-dealers from providing unfiltered or naked sponsored access to any exchange or alternative trading system (ATS). It requires broker-dealers to implement a system of supervisory procedures and risk management controls to limit financial exposure from direct market access and to ensure compliance with regulatory requirements. The rule is indicative of the SEC's larger effort to better ensure the markets are fair, transparent and efficient and that risks associated with the placement of orders are being appropriately managed by firms.
View SEC Rule Release
FrontLine Compliance, LLC is a regulatory compliance consulting firm of former high-level regulatory insiders offering customized services to broker-dealers, investment advisers, investment companies, hedge funds, and insurance company affiliates. Staffed by former SEC and FINRA regulators, and chief compliance officers, FrontLine Compliance provides the kind of industry knowledge, experience and expertise on regulatory issues only available from well-seasoned insiders. For more information about the firm, please visit www.frontlinecompliance.com.
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