SEC Alert! Securities and Exchange Commission Chair Gary Gensler is expected to propose major changes to the rules governing the stock market.
Source: https://www.politico.com/news/2022/10/12/wall-street-gary-gensler-sec-00061245
The Securities and Exchange Commission today voted to adopt amendments to the electronic recordkeeping, prompt production of records, and third-party recordkeeping service requirements applicable to broker-dealers, security-based swap dealers (SBSDs), and major security-based swap participants (MSBSPs). The amendments are designed to modernize recordkeeping requirements given technological changes over the last two decades and to make the rule adaptable to new technologies in electronic recordkeeping. The amendments will also facilitate examinations of broker-dealers, SBSDs, and MSBSPs.
Statement on Final Rule Amendments to Electronic Recordkeeping Requirements - Gary Gensler
The Commission will consider whether to adopt final rule amendments to modernize the electronic recordkeeping requirements for intermediaries such as broker-dealers and security-based swap dealers.
the brokerโs electronic recordkeeping system must preserve electronic records such that an original record can be recreated even if it is modified or erased. Further, these requirements would for the first time apply to nonbank security-based swap dealers.
Statement on Amended Recordkeeping Requirements - Commissioner Jaime Lizรกrraga
In addition, the amendments requires records maintained by a firm to be provided to the Commission in a reasonably usable electronic format.
Finally, the Commission is designating FINRA as the Commissionโs designee for purpose of accessing its membersโ records.
Given the inflexibility and costs of our current rules, I am happy to see this recommendation come before the Commission. The rule provides what appears to be a viable, less expensive, and more useful alternative to WORM that I hope will benefit both our regulated entities and the Commission as it supervises and examines them.
At the same time, our experience with the rule we adopted in 1997 nags at me. The release we are considering states that one of the goals of this rulemaking is to make the requirement โmore technology neutral.โ I hope these amendments achieve this goal, but, to be frank, our experience over the past quarter century with the existing rule leaves me in doubt. As commenters pointed out, even in the mid-90s, it would have been foolish to assume that optical storage technologies would continue to be a commonly used form of storage.
Notwithstanding these concerns, I believe that this rule represents an improvement over our current, outdated requirement and am happy to support it. To be clear, however, I view this as an initial step toward a truly principles-based, technologically neutral future where our registrants are free to find the best solutions available to meet our regulatory requirements.
