Talking Points – March 2022

Who We Are

Founded in 1934, STA[1] is comprised of 24 affiliate organizations in the US and Canada. The STA national board of governors is comprised of past presidents and industry specific leaders. Our membership represents INDIVIDUALS from varying business models: asset owners; asset managers; broker dealers who service institutional, retail and self-directed retail investors; vendors; exchanges and market makers dealing in equity, ETF and derivative trading.

SEC Rule Making Process – Challenges with 30-Day Comment Periods.

It is STA’s view that the notice-and-comment process is critical to effective SEC rulemaking.

Since December 15, 2021 the SEC has proposed fourteen (14) rulemakings – the majority of which only having thirty-day (30) public comments periods. These actions are in contrast to the Commission’s historical use of 60-days to 120 days comment periods. We believe this pattern is inconsistent with the Administrative Procedure Act and will lead to greater occurrences of unforeseen negative consequences.

SEC Staff Report on Equity and Options Market Structure Conditions in Early 2021
STA appreciates the efforts of SEC Staff in compiling their report on market events in early 2021.
We believe the Staff’s report provided certain insightful observations, debunked some misconceptions expressed in the public domain, and re-enforced the general belief that our markets performed well operationally during an extreme volatile period.
STA was encouraged to learn that the Consolidated Audit Trail played a material role in the Staff’s analysis and we hope this marks a beginning to the benefits CAT can provide.

SEC Proposes Significant Expansion of Regulation ATS – “Communication Protocol Systems”

On January 26, 2022, SEC proposed rules that would (i) expand the types of systems that must comply with Regulation alternative trading systems (Reg ATS); (ii) apply Reg ATS and Regulation Systems Compliance and Integrity (Reg SCI) to systems supporting trading in government securities; and (iii) modify certain disclosure requirements on Form ATS-N. The Proposal refines and expands on a similar SEC proposal from September 2020 to extend Reg ATS and Reg SCI to alternative trading systems (ATSs) for government securities. The SEC is reproposing the prior proposal with certain changes — in particular, by expanding the scope of Reg ATS to include “communication protocol systems” that use non-firm trading interest to bring together buyers and sellers of securities. 

It is STA’s view that the expanded scope of Reg ATS to include “communication protocol systems” – a newly coined term as it pertains to financial markets – represents a significant change that requires considerable time to understand and debate. For example, STA is particularly concerned that the SEC’s estimate that the elements for determining a communication protocol system impacts twenty-two existing platforms that are currently non-ATS entities is low.

[1] STA is a trade organization founded in 1934 for individual professionals in the securities industry. STA is comprised of 24 affiliate organizations in North America with individual members who are engaged in the buying, selling and trading of securities. STA is committed to promoting goodwill and fostering high standards of integrity in accord with the Association’s founding principle, Dictum Meum Pactum – “My Word is My Bond.” For more information, visit

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