Aug. 24, 2022
To: rule-comments@sec.gov From: Steven I. Givot Re: File No. S7-05-15 Date: August 24, 2022 Over the period of 44 years, my career in the securities industry included forming four (4) broker-dealers (serving in various capacities including CEO, COO, President, Partner, and always responsible for compliance), 9 years on the board of directors of a national securities exchange, and serving as a vice-president of two other national securities exchanges. My experience in regulatory matters is extensive. It appears that some commenters misunderstand the regulatory framework this proposal is seeking to modify. The broker-dealers that are currently covered by the exemption in Rule 15b9-1 are not themselves Self-Regulatory Organizations (SROs). SROs are not broker-dealers that are somehow left to regulate themselves. SROs are the various exchanges and FINRA. What we are talking about here are broker-dealers that do not have any customers, so they are currently exempt from being FINRA members - since FINRA regulates broker-dealers that do have customers. This proposal would force those broker-dealers that do not have any customers to also become FINRA members. Even though the broker-dealers in question do not have customers, they are far from unregulated. Every broker-dealer of any type is regulated by the SEC. That is one (1) regulator. Additionally, broker-dealers are regulated by one exchange of which they are a member. For those keeping count, that is two (2) regulators. This proposal would force those broker-dealers that do not have any customers to also join FINRA so they can pay additional fees to be regulated by a third (3rd) regulator. I am writing to clarify, as some could take the view that this will not increase regulatory efficiency. It most assuredly would increase regulatory costs without providing a corresponding improvement in regulatory quality.