Reg SCI rules by SEC addressed in new Exegy Inc. package

Rick Steves

Low-latency technology provider Exegy Inc. developed a new package of managed services, product and remote management infrastructure features, compliant to Reg SCI, in partnership with two alternative trading system (ATS) operators in U.S. equities, as well as the International Securities Exchange (ISE) which operates three U.S. options exchanges. Reg SCI stands for Regulation Systems Compliance […]

Reg SCI rules by SEC addressed in new Exegy Inc. package

Low-latency technology provider Exegy Inc. developed a new package of managed services, product and remote management infrastructure features, compliant to Reg SCI, in partnership with two alternative trading system (ATS) operators in U.S. equities, as well as the International Securities Exchange (ISE) which operates three U.S. options exchanges.

Reg SCI stands for Regulation Systems Compliance and Integrity and, being one of the most substantial rules the US Securities Exchange Commission (SEC) has passed recently, its purpose is to minimize the rash of technology outages that has been affecting capital markets over the last five years, most spectacularly seen in 2012’s software glitch at Knight Capital Group (KCG) that cost the company approximately $440 million in 45 minutes on August 1.

Reg SCI has become effective since late 2015, with all stock exchanges, the DTCC, NSCC, FINRA and MSRB falling under its rule, as well as 12 ATSs, covering about 75% of all trading volume. The SEC estimates that each SCI will have to report 14 disruptions to its participants and the SEC: 500 events in total.

While there is a consensus that these rules safeguards markets from many of the occurrences and severity of major outages, by requiring more transparency and reporting, critics argue that some rules are too wide in scope and still wouldn’t be applied to KCG, deeming it unable to prevent the famous event in 2012.

Nevertheless, electronic trading firms will have to follow the rules and need compliant technology to do so. There’s where companies like Exegy come in, with updated software that allows its clients to respect requirements:

Jamie O’Donnell, CEO at Exegy said: “Our integrated managed service model enables us to stretch beyond the boundaries of typical vendor relationships in order to form strategic partnerships with our customers. We welcomed the opportunity to engage with our customers to sort through the requirements of Reg SCI and to develop the capabilities required by firms subject to the new regulations.

“It was an outstanding opportunity to enhance the value of our products and managed services. We are now prepared to assist additional firms that are seeking to develop or to improve their Reg SCI compliance regime, in addition to improving the performance and cost effectiveness of their mission-critical market data infrastructure,” added O’Donnell.

According to Exegy, the effort to achieve compliance can be significant, including the development of new controls and procedures concerning systems development, stress testing, system monitoring, data management, security, business continuity planning, and disaster recovery, as well as developing or extending existing documentation and implementing periodic reviews and risk assessments.

ISE CTO Thomas Reina said: “We chose Exegy over five years ago for their ability to deliver the performance, efficiency, stability, and continuous support that we require for mission-critical market data. They have served as a strategic partner through the launches of our ISE Gemini and ISE Mercury exchanges, as well as our efforts to build the necessary capabilities to achieve robust Reg SCI compliance in our feed handling infrastructure.”

Reg SCI compliant firms have improved mechanisms to confirm stability and resiliency of its technology infrastructure against potential vulnerabilities caused by natural disasters, technology failures, and discoveries of potential security threats.

Compliance to rules include: providing comprehensive and well-documented process for the design, development, testing, monitoring, and management of systems that are essential to their operations. Entities must also provide evidence of implementation and enforcement of policies and procedures to ensure sufficient capacity, integrity, resiliency, availability, and security of their systems subject to Reg SCI.

Exegy is also offering a premium package of product features and managed services that includes: a corpus of documentation addressing operational policies and procedures, enhanced incident management and escalation procedures, more rigorous Service Level Agreements, expanded reporting and audit services, enhanced security controls and transparency into its products and global managed services infrastructure, and dedicated infrastructure for Reg SCI entities that includes geographically distributed disaster recovery sites.

 

Read this next

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

<