SIFMA and SIFMA’s Asset Management Group (SIFMA AMG) sent a letter to the SEC  regarding the SEC’s equity market structure (EMS) proposals and SIFMA’s as-yet unfilled FOIA request for anonymized Consolidated Audit Trail (CAT) data which the SEC used in drafting the proposals.

In the letter, SIFMA says it is imperative for the SEC to analyze the state of execution quality using the updated Rule 605 statistics before adopting any changes to the current equity market structure.

In February 2023, SIFMA submitted a comment letter on the proposals in which it requested that the SEC, under the Freedom of Information Act (FOIA), make public certain anonymized CAT data and other information the SEC relied on in formulating the EMS Proposals.  Without the data, it is impossible to evaluate if the veracity and robustness of the SEC’s analyses is in the public interest and furthers the protection of investors.

Despite numerous SIFMA letters and emails to the SEC regarding the FOIA request over the past year and a half, the SEC has been unwilling to engage with SIFMA regarding a reasonable approach to addressing the request expeditiously and consistent with the publicly stated imminent timeframe in which the SEC contemplates finalizing the EMS Proposals.   Unfortunately, SIFMA has been rebuffed each time it tried to reasonably engage with the staff on our FOIA request.

The letter concludes, “The Commission’s current trajectory regarding the EMS Proposals risks fundamental damage to the equity markets without a proper consideration of the data the Commission will have at its disposal, which can be corrected with a proper review and evaluation of the new Rule 605 data prior to proceeding with the EMS Proposals.”

SIFMA also published a related blog today, focused on concerns over the SEC’s use of CAT data in rulemaking.

Source: SIFMA