April 9, 2013
Comment on Proposed Rule 1000(f):
The Commission proposes Rule 1000(f) to facilitate the reasonable access of representatives of the Commission, either remotely or on site, to Systems Compliance and Integrity (SCI) entities and their security systems. Consistent with the Commissions current authority, Rule 1000(f) grants access more readily to general records in order to evaluate SCI entitys practices with regard to the proposed regulation SCI.
Given the nature of digital security, additional restrictions placed on the Commissions general access to an SCI entitys practices would hinder the goals of the Rule. In effect, less access by the Commission to entitys general records would only complicate Commission oversight and encourage entity non-compliance.
Digital security measures are the often the first and last line of defense to protect material nonpublic trading information. The Commission is acting appropriately, to require certain market players utilize measures to safeguard sensitive, material, and nonpublic information, and that such measures are up to par.
However, it seems fair to any SCI entity that they receive notice and reports of any conclusive findings concerning their SCI security systems and conforming performance thereof. This permits an entity reasonable opportunity to assist the Commission and vice versa.