This paper sets out to explain the new Securities and Exchange Commission Rule 15c3‐5, which will require broker‐dealers to adopt and implement risk controls to govern their provision of “direct market access” (DMA).
The paper explains how the development and use of automated electronic trading processes and systems motivated broker‐dealers to offer DMA, “sponsored access,” and “naked access.” It explains the systems of risk management controls and supervisory procedures a broker‐dealer is required to maintain to manage the financial, regulatory, and other risks of sponsored access, including financial and regulatory controls and procedures.
The SEC proposed the Rule to more effectively manage the financial, regulatory, and other risks, such as legal and operational risks, associated with market access.
The paper offers practical guidance from expert broker‐dealer lawyers.
Hardy Callcott, W. and Foley, T. (2011), "SEC approves rule banning “naked access” to trading centers", Journal of Investment Compliance, Vol. 12 No. 1, pp. 62-64. https://doi.org/10.1108/15285811111122092Download as .RIS
Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited